The British pound has been noisy during the trading session on Tuesday, initially falling rather hard, but then turning around to bounce a couple of times. At this point, it looks as if the volatility is going to pick up while the market tries to decide what to do with itself, and that you would not be looked upon poorly by stepping aside from this mess. However, I do see that the 1.32 level looks to be offering major support, so that’s something to keep in mind. If we can break above the 1.33 level, then the market could go even higher, but it seems very unlikely at this point.
I like buying pullbacks, but I also recognize that this market is going to be noisy enough that it could be difficult to hang on to the volatility. I would keep my position size small with an upward bias, because at this point that’s probably about as good as it gets. I think that we will eventually get some type of clarity that lifts the British pound, but until then you could be subject to sudden pullbacks that cause issues. If we were to turn around and break below the 1.32 level, then I think the market could unwind to the 1.3050 level again. That was a brutal sell off the other day, but we have recovered quite nicely and more importantly: stabilized. Stabilization after a move like that is typically a good sign.
GBP/USD Video 11.07.18
This article was originally posted on FX Empire
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