- You can see that the British Pound has broken pretty significantly to the upside during the trading session.
- And we are now looking at a potential break above the 1.3350 level.
- This is an area that I will be watching very closely as it has been important multiple times.
- With that being said, I also recognize that there is the possibility this is as far as we go.
So, in other words, what I'm watching is how this closes for the session. If this thing closes a little bit more to the downside, that could very well end up being a sign that the U S dollar is still fighting. It's a very real possibility, although I'm the first to look at it and suggest that perhaps it might be a little bit on the back foot right now.
If We Break Lower
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If we do break down, I would anticipate that the same support level comes into the picture offering support right around the 200 day EMA or the 1.3150 region. If we break higher, we have the 50 day EMA and the previous trend line coming into the picture offering resistance. So even on a break higher, I don't know that we've got the “all clear” to start going crazy buying the British pound.
Ultimately, I think you have to look at this very closely, but I think you have a potential trade setting up here. We'll just have to wait and see if we can break above that 50 day EMA, then I think that's a very strong sign for the pound. But if we can’t and we start to pull back from somewhere in this general vicinity, that could be a whisper that something's not quite right. It'll be interesting to see how this plays out. Traders continue to bet on what the Fed may or may not do, and that's what most of this noise is about at the moment.
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