- The GBP/USD has gone back and forth during the trading session on Friday, as we continue to hang around the 200-Day EMA.
- The 200-Day EMA is a longer-term technical indicator that a lot of people will pay close attention to and therefore it’s not overly surprising to see that this market has offered a little bit of support in this area.
- With, it’s interesting to see that we have set still after a massive outsized negative candlestick.
The outsized negative candlestick is of course a large negative range, and now that we have set still the question seems to be whether we have any momentum left. We should find out on Monday, and if we break down below the 200-Day EMA, then it’s very likely that the British pound could go down to the 1.20 level, maybe even the 50-Day EMA. On the other hand, if we turn around a break above the top of the candlestick, then it’s possible that we may make another attempt to get to the 1.25 level.
Market Continues to be Noisy
The British pound is going to be greatly influenced by risk appetite, mainly since the US dollar is a great signal as to whether it is a “risk on” or a “risk off” type of environment. The market will continue to be very noisy, and the fact that we are getting ready to see the holiday season come into the picture, then of course as a major influence on volume, and therefore it can have a major influence on volatility. If the market doesn’t have much in the way of major news announcements, it’s very possible that we may just simply drift back and forth in this overall general vicinity. However, if headlines crossed the wire over the next couple of weeks in a very old liquid environment, it could make outsized moves if it’s some type of shock.
That being said, if the market were to break above the 1.25 level, then we could really see the British pound take off to the upside, perhaps opening up the possibility of a longer-term “buy-and-hold” type of situation, as we are at a major crossroads at this point, therefore it’s worth noting that some type of huge decision is about to be made, but that might have to wait until January.
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