- The British Pound has gone back and forth during the course of the trading session here on Friday as we just don't have any real momentum at this point.
- The 1.2750 level above continues to be a significant resistance barrier and if we were to break above there then we could go much higher.
At this point, breaking above that level on perhaps a daily close and an impulsive candlestick, we could see this market looking to reach the 1.28 level. And clearing that opens up a much bigger move, perhaps to the 1.3150 level. Short-term pullbacks at this point in time will continue to be an opportunity for people to get in and take advantage of cheap pounds. I think at this point in time, it's very likely that the 50 day EMA would also come into the picture to offer a significant amount of support.
So, with all of that, I do think that this pair is more likely to go higher than lower, but when that happens, we'll just have to wait and see because quite frankly, this is a bit of a mess right now, and I do think that it is probably only a matter of time before the coil that is springing right now releases. When it does, it should be a rather strong move. Now, to say that we don't have any downside potential would be false, and a breakdown below the 50-day EMA could open up a move to the 1.25 level underneath.
The 1.25 level features the 200-day EMA, an indicator that a lot of people pay close attention to, and of course it is a large round number. In general, I think this is a market that is range-bound with more of an upward tilt but pay attention to what happens with speeches and comments coming out of Bank of England, because we already know that the Federal Reserve is likely to cut rates in 2024.
At The End of The Day
At the end of the day, looks like the market is trying to build up enough momentum to break out, but we have not seen any reason to do so quite yet. I think we will continue to test the short-term consolidation area in order to build up enough momentum to finally take out to the upside.
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