- The British pound has bounce just a bit during the trading session on Monday as the 50-Day EMA has stepped into the picture to offer support.
- That being said, it’s probably worth noting that the market has been somewhat bullish over the previous couple of weeks, with the exception of the end of last week.
- The question now is whether or not we can find enough momentum to continue pushing this market higher?
With this, the market is likely to continue to see a lot of noisy behavior, and I do recognize that although we have been bullish during the Monday session, the reality is that there is a lot of noise in both directions in the same general vicinity just above.
Expound of course will continue to enjoy more of a “risk on” attitude as long as the markets are not overly concerned about anything in particular as the US dollar is typically used as a safety currency. As things stand right now, it certainly looks like we are trying to recover but the question now is whether or not we can see any follow through, and if we can reach the 1.28 level above, which I see as a major barrier.
On the other hand, if we were to break down below the 1.2650 level, it’s possibly that we could go looking to the 1.26 level underneath where the 200-Day EMA sits. The 200-Day EMA of course is an indicator that a lot of traders will be looking at through the prism of algorithmic trading and perhaps trying to define the trend, and therefore it automatically makes it very important.
Expect Choppy Behavior
Regardless of which direction we go, I think at this point in time we are likely to see a lot of choppy behavior, and I do think that given enough time we will get some clarity, but in the short term it’s very difficult to imagine a scenario where it’s going to be easy to simply break in one direction or the other. During this week, I expect to see a lot of noise, but I also recognize that Thursday will be the true test of this market as we have the Bank of England interest rate decision and all the accompanying noise.
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