The British pound fell during the trading session on Friday, breaking below the 1.27 handle. Ultimately, this is a market that looks as if there is a lot of support just below though, so keep that in mind. The 1.25 level underneath is massive support, and therefore it is a large, round, psychologically significant figure. Ultimately, I think that we are in the middle of a major bottoming process, as the Federal Reserve has stepped away from bullish monetary policy. At this point, the market is in the process of trying to turn itself around.
GBP/USD Video 17.06.19
At this point, if we break above the 1.28 level, the market is likely to go to the 1.30 level. At this juncture, it’s obvious that the market is going to remain volatile and of course the nonsense going on with the Brexit will continue to cause major problems. However, I think we are starting to look at the US dollar in a different light, which has been overvalued against several currencies.
That being said, this is going to be a longer-term process, and I think that a move to the 1.30 level makes a lot of sense. That doesn’t mean it happens today, it most certainly will happen tomorrow. This is more of a longer-term trade set up. In the short term I believe that pullbacks will offer buying opportunities but you will probably need to get out of the market relatively quick as headlines will rock this pair quite frequently over the next several months.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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