With the handful of US centric economic announcements coming out over the next couple of days, it could be relatively quiet in the Forex world. However, it does appear that the British pound is starting to pick up steam, and now that we are breaking above the 1.39 level, it’s likely that we should then go towards the 1.40 level after that. I recognize that the market will continue to be very noisy, especially considering that there so many headline risks coming out of the negotiations between London and Brussels, so obviously that can cause us the occasional hiccup. However, I do believe in the British pound longer term, so I expect to see this market break the 1.40 level eventually. Once it does, we will more than likely go towards the 1.43 handle after that.
In the meantime, I believe that the 1.3650 level underneath is the “floor” in the uptrend, so until we break down below there I’m not interested in selling. I believe that the historically cheap British pound is going to continue to rally, but if we were to break down below the 1.3650 level, I think that the pair would break down significantly, perhaps reaching down to the 1.35 level after that, perhaps even down to the 1.33 level. I would anticipate the mood to be rather violent at that point, showing signs of melting down. However, I believe that the buyers will more than likely
Written by FX Empire