The British pound has gone back and forth during the trading session on Tuesday, as we are dancing around the 1.23 level. This is an area that was significant support and resistance over the last several months, but at this point I think that any bounce will probably be sold into due to the fact that the 50 day EMA is starting to slope lower and we did see a bit of resistance recently as well. In other words, I think that we will simply fade rallies as they occur.
GBP/USD Video 01.07.20
The 50 day EMA and the 200 day EMA are both sloping lower, showing that we are in a longer term downtrend. That and the fact that we have the Brexit coming tells me that the British pound will continue to be very volatile to say the least. At this point in time, it is likely that the market is going to continue the volatile moves that we have seen as of late, because quite frankly it is only a matter of time before we get a headline about Brexit or something else that causes issues.
Beyond that, we have a lot of fear out there and that almost always drives money into the greenback given enough time as the Treasury market will attract a lot of capital inflows as well. Looking at this market, I have no interest in buying the British pound, at least not until something changes drastically.
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This article was originally posted on FX Empire
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