- The British pound rallied on Friday as it looks like we are trying to dig into the resistance just above that extends from 1.27 to the 1.28 level.
- It looks like a market that I think will continue to struggle to get above 1.28.
- It is worth noting that Monday is a major holiday in both the United States and the UK. So, not looking for much.
I think the 1.28 level is important, but. This just looks like chop to me. I think we are getting extended, and it wouldn't surprise me at all to see the GBP/USD market run into a bit of exhaustion and turn things around. So, with that being the case, I am a little bit hesitant to take too long in this market and I certainly wouldn't get too big.
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If you look back at the end of last year in November, December, and even into January this year, it was very choppy in this area. There's nothing on this chart that tells me it's going to be any different this time. So, I think you are relegated to short-term trading more than anything else. You have to recognize that the market is very likely to be one of confusion, chop, and noise. That being said, it doesn't mean that you can't trade it. It just means that I'm not looking for massive moves. Over the last couple of weeks, it's been a pretty big move, all things considered. So, with that, I do anticipate a little bit of a fade here, but not with enough conviction to put a lot of money into this market.
All things being equal, this is a market that will be range bound
I think at this point in time we will continue to see a lot of noisy and sideways action, and I do think at this point in time we probably do need to take a little bit of a breather. If we were to break out to the upside, we would need to see the US dollar take a beating against almost everything, not just the British pound itself.
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