The British pound has fallen significantly during the trading session on Tuesday, reaching down towards the 1.4050 level before bouncing. It looks as if the Americans are willing to pick up the British pound though, so we may see a bit of a bounce. We are most certainly still in an uptrend, even though we’ve had a significant selloff. Because of this, I prefer buying this market based upon value, and I think we are starting to see the value present in the market. I think that we will go looking towards the 1.4250 level again, and then perhaps even the 1.43 level.
If we can break above the 1.43 level, then we could see the market go looking towards the 1.45 handle after that. Even if we do fall from here, I think that the 1.40 level will offer massive support next, so I think I would be even more interested in buying in that area. If we find a bit of a bounce there, it could be an excellent buying opportunity. However, if we were to break down below the 1.40 level, that could be very negative and could send in much more pressure to the downside. At that point, I would anticipate that the market could go to the 1.3850 level next. This will continue to be a very noisy market, but ultimately the trend is still to the upside and I think that although there is a lot of concern around the world, I think that the British pound is still essentially cheap.
Written by FX Empire