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Ultimately, fading signs of exhaustion will be what I am looking to do.
The 50-day EMA above is going to offer a little bit of resistance, at least from a technical standpoint. Regardless, the British pound is a currency that I would not be overly excited to own at the moment, especially against the US dollar. Granted, the interest rates in America have fallen over the last couple of days, but to think that we are done with tightening is a bit of a stretch. The candlestick for the Friday session shows confusion, and if we break it down below the bottom of the candlestick for the day, and therefore it’s likely that we go down to the 1.18 level. The 1.18 level is a significant area to pay close attention. If we break down below that level, then it’s likely that we will go down to the 1.15 handle.
If you break above the top of the candlestick, then it’s possible that the British pound could go looking to the 1.24 level. 1.24 level have seen both buying and selling in the past, so it does make a certain amount of sense that we would see a reaction in that area. I still believe that the US dollar is going to continue to go higher in value, but that doesn’t necessarily mean that we are going to see it happen right now. Ultimately, fading signs of exhaustion will be what I am looking to do.
The 50-day EMA continues to be important, and at this point in time, it’s likely that the market is going to continue to see a significant amount of volatility, as there has been a line of confusion when it comes to interest rates, and course whether or not the world is going to head into a huge recession. Global slowdowns tend to favor the US dollar, so that is going to continue to be a bit of driver for this market.
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