British pound rallies on Monday

The British pound rallied significantly during the trading session on Monday but ran into a little bit of trouble at 1.4150 level. However, this is a minor area and I think that it’s unlikely to keep the British pound down. I believe that we should then go towards the 1.42 level above, which of course is a bit more significant due to the round, psychological importance of the number. The market looks likely to be a bit choppy, but I believe that pullbacks should continue to be buying opportunities. Ultimately, if we can break above the 1.42 level, the market should then go to the 1.43 level.

I believe that the “floor” in this market is the 1.40 level underneath, so I think that the market will continue to pay attention to that level. If we were to break down below there, that could change things for a while, but I think that with the Bank of England likely to raise interest rates, and the possibility of tensions calming down between the United States and China, that should only bring in more risk appetite to the currency markets. That should be bullish for the British pound, and therefore this pair.

I believe that the 1.43 level above is massive resistance, and it’s not until we break above that level that we are free to go to much higher levels. However, once we do that should extend the uptrend towards the 1.45 level. I hate don’t have any interest in shorting this market right now, as I believe that the buyers will continue to favor value.

Written by FX Empire