- The British Pound has rallied a bit during the trading session on Wednesday, but it looks like we are continuing to slam into this 1.2750 resistance barrier and the 200 day EMA to just keep the market stabilized.
- If we can break above all of this, the market could then go looking to the 1.3150 level, which was the massive high from several months ago.
- This is an area that I think it would take a lot of effort to get to after what we have seen over the last couple of weeks.
- Can the British pound ever build up the necessary momentum to take advantage of perceived Federal Reserve listening this year?
Technical Analysis
When I look at this chart, it's hard not to acknowledge that we are right at the 61.8% Fibonacci retracement level from the sell-off. So that of course makes a certain amount of sense that it acts as a barrier as well. In fact, this has been an area of consternation for buyers for some time. That being said, eventually it will give way one way or the other, so therefore we need to pay close attention to any impulsive candlestick that ends up forming. Because of this, I like the idea of waiting for more momentum, but if you are a short-term trader, this might be a great market for you. You will have to pay close attention to the short-term charts more than anything else.
If we do break down from here, the 1.25 level has the 50 day EMA offering support and it could be a target for the sellers, but right now it looks like we're very much neutral. In this neutral environment, you will probably have to cut down to the 30 or 15 minute charts, looking for opportunities. Even the one hour chart might be doable. From a daily perspective though, it's very difficult to get overly aggressive one way or the other and therefore this is a short-term scalpers type of market. If and when we finally do get some type of economic news that changes things, then obviously we will be able to make a much bigger trade but right now it's going to be the type of market that you look for range bound kind of systems maybe a stochastic oscillator or something to that effect to use to guide you as well.
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