- The British pound initially plunged during the trading session on Wednesday but then turned around to show signs of life as we have broken back above the 1.14 level.
- This is an area that has been important more than once, and the fact that we are trying to form a hammer does suggest that there are buyers willing to come in and pick up cheap British pounds anytime they get an opportunity.
Furthermore, the 50 Day EMA sits near the 1.1340 level and rising, and it’s also an indicator that a lot of people will be paying attention to because it has acted a bit like an uptrend line in this market as of late, and it is worth paying attention to because it’s a fairly popular technical indicator anyway. As long as we can stay above that indicator, I am still looking to the upside for the possible opportunity here and there. I recognize also that the 1.15 level above current trading is going to be a bit resistant, so I do think that it would be a huge sign that the British pound was going to continue to strengthen if we were to take that level out.
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Buying on Dips
I will be buying on dips going forward, but I do think that this will more likely than not end up being a very choppy currency pair. After all, this is a pair that is highly sensitive to a lot of risk appetite factors, and quite frankly there are a lot of things out there right now that have people concerned. Tariff wars, the geopolitical concerns, and the fact that a huge portion of the global economy might be slowing down all have people concerned, but at the same time, the interest rate differential between the United Kingdom and Switzerland is large enough to make this a fairly attractive long position for quite a few traders.
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