The British pound initially tried to rally during the day on Monday, but found resistance at the 1.3450 level, and then turning around to break down towards the bottom of what could be thought of as a nice downtrend in general. However, I do see that there is a significant amount of support underneath, and I believe it’s only a matter time before we rally again. This of course will be heavily influenced by geopolitical concerns, and of course risk appetite in general. The 1.33 level underneath is significant in its importance, as it has been both support and resistance lately.
When I look at this chart, I do believe that eventually value hunters come back, especially if the negotiations between the United States and North Korea go well, because it will give us an opportunity to rally due to the risk appetite of traders being bullish. I think this slow and gentle pullback has been very healthy in a market that is trying to find its footing. If we were to break down below the 1.33 handle, then it’s only a matter of time before we reach down towards the 1.32 handle. However, I do believe that the buyers are trying to make a stand as I record this, and even though we had seen a relatively significant move to the downside, I believe that we will find value hunters coming to this market rather soon as value is presenting itself.
GBP/USD Video 12.06.18
This article was originally posted on FX Empire
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