The British pound fell in reaction to the statements coming from the Federal Reserve press conference, as traders are now looking at a potential interest rate hike from Washington.
The British pound has fallen pretty significantly during the trading session here on Wednesday as the Federal Reserve kept rates where they were, but they did suggest that perhaps they could raise rates later this year due to inflation.
We'll have to wait and see how that plays out because, quite frankly, there hasn't been much in a slowdown when it comes to the United States, and if that ends up being the case, that could be a big deal.
Ultimately, I think this is a market that continues to look at the 1.33 level underneath as a support level with the 1.35 level above being a bit of a barrier. This is an area that will continue to be very different to overcome from what I can see at this point.
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Technical Support and Upcoming Holiday Liquidity
All things being equal, though, I think not much has changed. We'll probably try to bounce towards the 200-day EMA again, but I wouldn't have a huge conviction-type trade setup that I see coming around the bend.
Ultimately, you should also keep in mind that Friday is a holiday in the United States in the form of Juneteenth, and that means liquidity will disappear later in the day on Friday.
The situation in the Middle East continues to cause some headaches for traders as they are trying to determine whether or not the interest rates will continue to rise or fall. Expect a lot of choppiness and volatility in the short term, but it is likely that we stay in the same range we have been in despite the fact that we've seen so much in the way of erratic.
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