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British Pound vs US Dollar Weekly Technical Analysis
The British pound has fallen significantly during the course of the week to reach the 1.2650 level. The 1.2650 level underneath is a large, round, psychologically significant midcentury number, where the market has previously seen a lot of resistance. Furthermore, we also have an uptrend line running into that area as well, so I think it all comes together to support the market in general. The Pound continues to see a lot of noise as the Non-Farm Payrolls number was cooler than anticipated. The dollar continues to see sellers in general, so it makes sense to see this pair going higher.
The 1.2650 level being broken to the downside would be a major breach of support and could see a follow through kind of move. In this situation, we could see this market drop to the 50-Week EMA, an area that could be important. Breaking through that level opens up a major amount of selling pressure. The market breaking higher could be a sign that the GBP is ready to go to the 1.30 level over the next few months, which makes quite a bit of sense. The interest rate hike a few days ago continues to be a major driver as well.
The candlestick being a hammer suggests that there are a lot of buyers in this area. This should continue to be the case going forward, so it could lead to a move higher. A break above that candle allows the market to pick up momentum. I expect this in the next week or two, but keep in mind that August continues to be choppy and sideways typically.
For a look at all of today’s economic events, check out our economic calendar.
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