- The GBP/USD currency pair has fallen a bit during the trading session on Tuesday, to peek below the 50-Day EMA.
- We are below the 1.20 level, so it does suggest that perhaps we are ready to continue going lower.
- If we break down below the bottom of the candlestick for the Tuesday session, then it’s possible to go down to the 1.1750 level.
GBP/USD Technical Outlook
We are breaking out of the area between the 200-Day EMA and the 50-Day EMA, which is an area where we see a lot of noise typically, so it does make a certain amount of sense that breaking out of this area could have people making a bigger move. On the other hand, if we turnaround and break above the 200-Day EMA, then it’s possible we could go looking to the 1.25 level above. I don’t think that’s going to happen, but it is a possibility so be aware of that. I expect a lot of choppy and noisy behavior, so keep in mind that the overall attitude of the market could be one of indecision, which does make a certain amount of sense considering that we have seen so many questions asked of what’s going to happen with central banks around the world, and with that being the case I think you got more likely than not choppy behavior over the next couple of days.
However, once we get the jobs number on Friday, it’s likely that we would see a lot of volatility jumping into the market, as people will try to read what the Federal Reserve is going to do going forward. The market is likely to see a lot of questions answered at the end of the week, as we continue to see the Federal Reserve as being very tight, perhaps offering more of a demand situation for the US dollar, especially as the United Kingdom is going to continue to have quite a few economic issues. The market will see a lot of pullbacks along the way, and I do think that short-term rallies show signs of exhaustion will probably get jumped on by short-term traders. Whether or not that sticks will remain to be seen, but we probably have that answer after that jobs number, or the following Monday as traders will be completely back to work by then.
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