The British pound broke to the upside during the trading session on Thursday, breaking above the 1.35 handle as we continue to get somewhat positive comments coming out of the mouths of Brexit negotiators. That being said, it is only a matter of time before we see some type of conclusion. I would not be surprised at all to see people and perhaps taking a bit of profit heading into the weekend though, because you never know what could happen. After all, a lot of traders have been disappointed multiple times in the past so a bit of trepidation would not be a huge surprise.
I believe that the 1.35 level should now offer a bit of support, so it would be worth paying attention to if we see a move towards that area, because it would give you an opportunity to pick up Pounds at an obvious support level. Having said that, you have to unfortunately pay attention to the latest comments coming out of Brexit negotiators, which will throw this thing all over the place as we have seen multiple times. It is a little of her stretched, so a little bit of a pullback would make a certain amount of sense, but you should also keep in mind that these are not normal times, so it is very possible that we see erratic moves.
It is very likely that we get some type of gap on Monday again, just as we had this previous week so keep in mind that it is going to be difficult to hang on to the British pound over the weekend is going to be difficult. That in mind, do not be surprised at all to see a little bit of safety hunting at the end of the session, but I do not necessarily think that I would read too much into them because one thing that we have seen multiple times is that no matter what happens, there are people willing to pick up the British pound “on the cheap”, because they believe that it is going to eventually work itself out in the form of a Brexit deal, as it is beneficial to both parties. With that being the case, simply buying dips continues to be the best way forward from what I see, and therefore that is probably how we will trade it.