- The British pound has rallied rather significantly during the trading session, smashing through the top of a shooting star.
- This was as Jerome Powell finally admitted that the Federal Reserve is going to have to start cutting rates and we have in fact seen the US dollar get pummeled as a result.
- With that being the case, I think you've got a situation where traders will continue to look at this through the prism of a market that remains very noisy, probably bullish.
The 1.32 level being broken is a big deal. Now we have turned things around to be in a longer term uptrend. That doesn't mean that we shoot straight up in the air, but it does suggest that there should be plenty of support near the 1.30 level on any pullback. We also have to ask questions of whether or not risk appetite will remain fairly healthy.
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Safety in the Greenback?
The US dollar is considered to be a safety currency, so if people start to see a lot of concerns to worry about, that could turn things around. But it looks to me like the British pound is one of the favorite currencies right now, and I think that's probably going to continue to be the case, as it is doing fairly well against most things. The 1.30 level underneath should offer support, but if we were to break down below there, then we have to ask some questions. But the size of the candlestick during the trading session on
Friday really tells you that there is a lot of interest to the upside. I do think ultimately the U S dollar continues to get shorted, and the British pound continues to be one of the favorite currencies by Forex traders around the world. In general, I think we probably have much further to go, perhaps the 1.35 level, but it doesn't mean that it's going to be easy. In fact, the GBP/USD market will continue to be very noisy, but I think the market will continue to see a lot of people interested in any type of value when it comes to sterling.
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