The British pound fell on Wednesday again as we continue to see a lot of questions asked about the Middle East and where peace efforts may or may not be able to go.
All things being equal, this is a market that I think continues to see a lot of trouble due to the fact that the US dollar of course is being a safety currency, and as we continue to see a lot of back and forth when it comes to the Middle East peace process, it does make quite a bit of sense that we see a lot of traders worry about the global supply chain and therefore start looking for safety in the form of the greenback.
The 200-day EMA sits right around the 1.34 level, an area that's been important multiple times, and I think that might be the next support level that people will be focused on. If we break down below there, then it opens up a move down to the 1.33 level, which is a significant area that has shown itself to be supported.
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If we do turn around and take off to the upside, we could go looking at the 1.35 level above. The 1.35 level is an area that's been very noisy in general, and I think we have a market that, quite frankly, anytime it rallies, you have to be a little bit suspicious, but I don't think this is a massive drop just waiting to happen.
Keep in mind, the British pound is backed by higher interest rates than many other currencies, so the British pound is a little more resilient against the dollar than many other contemporaries.
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