The British pound has initially tried to rally during the trading session on Tuesday but has given back the gains to fall rather significantly. At this point, it looks like we are going to continue to be very volatile and negative, but the 1.2850 level could offer a bit of buying opportunities. If we break down through there, it’s likely that the market will then go looking towards the 1.28 level for support. Below there, things could get rather ugly. More than likely though, we will find buyers sooner or later, giving us an opportunity to trade the range that we have been in.
GBP/USD Video 15.05.19
To the upside, clearing the 1.30 level could open the door to the 1.1375 region, which would be a simple rotation of the market right back to where we had fallen from. Remember, the British pound has the added nonsense of the Brexit going on, but beyond that we also have global markets and the fear that can come at times with the global trade war going on. If the global conditions deteriorate, it’s likely that the British pound will take it on the chin as the US dollar is in high demand during those times.
Ultimately, this is a market that is going to continue to be very choppy longer term, at least until we get some type of certainty when it comes to the Brexit, and that could be a while. Longer-term traders would have to be looking at this as a potential value play, but I suspect he will probably get plenty of opportunities to pick up value.
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This article was originally posted on FX Empire
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