The British pound has rallied Monday as the Department of Justice announced it was investigating Jerome Powell. However, we see the same resistance area.
- The excuse this morning was that the Department of Justice is looking at Federal Reserve Chairman Jerome Powell, and that had the markets nervous.
- Anytime you start to see politics played with major participants, they do not like that.
- At this point though, the reality of the situation is whether or not he gets indicated really does not matter. He will not be the Federal Reserve Chairman by the time anything would happen, and I think that is what you are starting to see the markets come to grips with.
Top Regulated Brokers
The reality is it really does not change anything. With that being the case, the 1.3550 level continues to be significant resistance and I am looking for signs of exhaustion to start shorting. I do believe that we are starting to see that in short-term charts.
A Market Stuck in a Familiar Range
I am not looking for a big move to the downside; in fact, I think the 50-day EMA at the 1.3372 level continues to offer a floor. As a result, I think this is a short-term back and forth type of setup. But when I look at the longer-term charts, it is worth noting that despite the volatility, we are at the same place we were at in June.
Although it has been exhausting to trade this pair at times, the reality is nothing has changed. We have made a series of lower highs though, and that might be something looked at through the lens of a longer-term trader. If we break down below the 1.33 level, I think at that point in time the bottom falls out and it would not surprise me if that ends up being the case. Keep in mind that the British pound has outperformed its peers against the US dollar both up and down over the last couple of years and I think that will probably continue to be the case.
Ready to trade our daily GBP/USD Forex forecast? Here’s some of the best forex broker UK reviews to check out.