The British pound went sideways initially during the day on Friday, but then collapsed after the jobs number came out much longer than anticipated in America. The British pound has been beaten up rather significantly over the last couple of sessions, as we had the Bank of Japan suggesting that interest rate hikes aren’t coming until we get into the 2018 year. During the Friday session, the jobs number was stronger than anticipated so that of course helps the US dollar. The 1.30 level underneath should be supportive, but I think if we can break down below there the market will go looking towards the 1.2850 level. Alternately, if we rally from here I think that there should be a selling opportunity above. It’s not until we get back above the 1.32 handle that I would be comfortable buying.
Shaky British pound
I think that the British pound will continue to be shaky overall, so I am negative in the short term. I don’t know what happens next, but I do recognize that the 1.32 level is very important. A breakdown below the 1.30 level census market to the 1.2850 level underneath, and a breakdown below that lights out the uptrend in my estimation. I think that the market should continue to be volatile, but given enough time I think we will have to make a decision. We have rallied significantly, so the pullback was necessary. The question now is whether the pullback is what we are seeing, or if we are breaking apart. The next couple of sessions will dictate where we go for the next several weeks.
Written by FX Empire