This is one of the few currencies I like over the US dollar, as the interest rates in the United Kingdom remain higher than most others. If we see the Pound struggle against the Dollar, we would probably see many others do the same.
GBP/USD Remains Range-Bound as Traders Seek Clear Direction
The British pound has been all over the place during the trading week as we continue to see a lot of questions asked about what the proper direction is in this interest rate environment. Interest rates have been strong for a while, and they have turned right back around to show signs of life. Ultimately, the 1.35 level above is a major resistance barrier and if we could break above that, that would obviously be a very bullish turn of events for the British pound itself.
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Technical Levels and Market Outlook
If we turn around and fall from here, breaking below the 200-day EMA, then we could see this market drop toward the 1.33 level. At this juncture, I do believe that this market will be noisy, I think it will be very choppy, but I also recognize that it could turn things around and open up the possibility of a bigger move towards the 1.36 level. This would take some work and possibly time, I think this is very possible.
I do know that the interest rate differential favors Great Britain at the moment, although I recognize that it may not just take off to that direction. With this, I like the idea of buying value when I get the opportunity on dips. This is one of the few currencies I like over the US dollar. It's really not until we break down below the 1.33 level that I would short the British pound and more likely than not, I would see US dollar strength across the board and would probably be shorting other currencies already against the greenback.
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