- The British pound rallied a bit on Friday but cannot seem to hang onto gains against the USD.
GBP/USD
The British pound rallied a bit during the early hours on Friday to test the 1.35 level yet again. This is an area that has been important multiple times, and I think it is worth watching very closely.
The market is likely to continue to see a lot of noise in this general vicinity with the possibility of breaking out to the upside. Breaking out to the upside opens up a move to the 1.37 level.
A breakdown from here, breaking below the hammer from the Wednesday session, could open up a test of the 50-day EMA, possibly even the 200-day EMA underneath there. All things being equal, I think this is a market that is trying to find the momentum to break out, but it just can’t seem to get over this 1.35 level.
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Market Outlook and Volatility
We will probably make a more profound statement sometime later next week, but in the meantime, I think you have got a lot of choppy short-term back-and-forth trading ahead. I don’t like the idea of getting too heavily involved in the market at the moment, mainly due to the fact that liquidity and volume are still issues, and of course, we don’t really have momentum to deal with.
By the end of next week, though, I do anticipate that we probably have a real shot at some type of movement. I do think that the end of next week, with the jobs numbers coming out of the United States, could give you a little bit of momentum in this pair.
Between now and then, we are probably going to be very jittery and choppy, and with that, I look to short-term charts more as a range-bound trader as it continues to offer short-term opportunities, perhaps on something like the 15.
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