The British pound has gone back and forth during the trading session on Wednesday, showing signs of hesitating after the initial massive surge higher. By doing so, the market looks very likely to continue seeing a lot of hesitation in this general vicinity, due to the fact that it had been important previously. Regardless, this is a market that is supported just below, especially near the 1.37 handle. This is a market that has seen a lot of interest in the 1.37 handle, not only due to the fact that there is structural noise there, but there is also the 50 and the 200 day EMA indicators in that same vicinity.
GBP/USD Video 21.10.21
Looking at this chart, if we can break above the 1.3850 level, then we could go looking towards the 1.40 level. This is a market that probably goes higher over the longer term, but in the short term may need to do a bit of momentum building in order to make its decision. If we break down below the 1.3650 level, then it is likely that we see the market roll over, reaching towards the 1.35 handle over the longer term. That being said, the British pound has had a bit of a boost lately, due to the fact that the Bank of England looks very likely to raise interest rates between now and the end of the year. In that scenario, there may be a little bit of a repricing necessary for Sterling.
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This article was originally posted on FX Empire