- The British pound broke higher during the course of the training session on Tuesday, smashing through the 200-Day EMA like it wasn’t even there.
- We have not only broken above the 200-Day EMA, but we have also smashed through a major downtrend line that had been a lot of resistance.
- Ultimately, any short-term pullback at this point in time will probably attract a lot of people trying to get involved in the “FOMO” type of trade.
The 200-Day EMA underneath will offer quite a bit of support, and therefore I think that this is an indicator that a lot of people will be very cognizant of. Now that we have sliced through that market leading indicator, I think that the trend is starting to change. For what it is worth, the Swiss franc seems to be in trouble across the board in general.
Swiss National Bank
The SNB of course is notorious for being dovish, and therefore I think you need to pay close attention to the idea that perhaps the Swiss franc will be eviscerated. It is worth noting seen that the Swiss franc had been historically strong, and therefore I think a lot of traders will continue to look at this through the prism of whether or not they can take advantage of “cheap pounds”, or any other currency for that matter as we have seen all of the same action across the board.
Ultimately, I am looking for an opportunity to get long of this market, because unfortunately I did miss the move early in the day, but I do think that sooner or later that pullback will appear. I would be especially interested in the British pound at 1.11 CHF, which would be a bargain after this move. On the other hand, if we do end up breaking above the 1.12 level, I may have to simply swallow my pride and start buying there. If I were to do that, I would obviously have to be very cautious with the position sizing, because volatility is something that this pair is known for, and of course something that I think will show up sooner rather than later after this type of move.
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