- The British pound has rallied significantly during the early hours on Monday, as it looks like we are in the process of trying to break out and start to rally as the pair is in the process of recovering.
- After all, we had plunge quite drastically, but the longer-term trend still very much remains bullish.
- As long as that’s going to be the case, I don’t have any interest whatsoever in trying to short this market.
Technical Analysis
The technical analysis for this pair is short-term unstable, but longer term bullish. We had pulled back to the 200-Day EMA only to turn around and show signs of strength again. We have broken above the highs of the last week or so, and that does suggest to me that we are going to go higher. At this point, the first target would be the 50-Day EMA, which is near the 1.14 level above. If we were to break above that, then I think we will start looking to the 1.15 level.
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Short-term pullbacks should be a situation where we are trying to find support near the 200-Day EMA, and perhaps even down at the 1.12 level underneath that. All of those areas have been rather supportive, and I do think that it is probably only a matter of time before we take off from any of those areas if we do in fact pull back. In general, I think this is a situation where you have to look at it through the prism of a continuation of the longer-term trend, and as long as we can stay above the 1.12 level, I think you have to remain somewhat positive.
Because of this, I am looking for buying opportunities only, and therefore don’t really have any interest in shorting. However, if we were to break down below the 1.12 level, I would have to reassess a lot of things going on, because at that point in time it could be a very positive look for the Swiss franc in general.
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