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British Pound vs US Dollar Weekly Technical Analysis
The British pound has initially tried to rally during the course of the week, but it looks like we are struggling to stay above the 1.2650 level. Ultimately, this is the market that ended up forming a bit of an inverted hammer after forming a very negative hammer during the previous week. Ultimately, this is a situation where we are testing a bit of a trendline, but more importantly, we are stuck between two major moving averages as the market continues to try to figure out where it’s going next. With a lot of liquidity coming back into the market next week, it’d be interesting to see how this plays out.
If we can break above the 200-Week EMA, then I think this market goes to the 1.30 level above. If we break down below the red 50-Week EMA on the chart, then the bottom could fall out and we could see a big drop from here. Keep in mind that when traders come back from the summer holiday, liquidity picks up enough that it could really start to move the market a bit further in one direction or the other. At this point, it’s just simply a situation where we are going to let the market do what it wants to do, and then we will just simply follow right along.
More likely than not, it comes down to the idea of what’s going to happen with the US dollar in general, so with that being the case I think you’ve got a situation where the markets are getting ready to make a bigger move, but a little bit of patience will save you a lot of headaches.
For a look at all of today’s economic events, check out our economic calendar.
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