Short term the Pound may find its value put to the test as it lingers near important resistance.
Pound Gains while Clouds Loom on Horizon
The Pound experienced an interesting day of trading as the week got underway. The British currency was able to put in slight gains and sustain its value, even as Prime Minister’s cabinet re-shuffle experienced political turbulence on Monday.
The Pound gained well against the U.S Dollar during the holiday season, and yesterday’s results as full trading returned to the broad markets are intriguing.
Pound near Significant Resistance
The Pound is near a significant resistance level and with questions lingering on the horizon about the exact mechanics of the Brexit, the British currency may run into speculative selling pressure.
The Pound has a solid support level around 1.34 and some traders may believe this could become a focal point near term.
Timeframe Differentials at Work for the Pound
Trading scenarios are frequently different when timeframes are taken into consideration and the Pound may prove an interesting example of this concept.
The British currency’s gains made over the holiday may be put to the test in the coming days, and the unclear political clouds hovering over the U.K government may add to the scrutiny.
In the short term, we believe the Pound may be negative. In the mid-term and long-term, we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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This article was originally posted on FX Empire
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