• The British pound slides toward its 200-day EMA on Thursday, testing key support near 1.32.
• Analysts see continued bearish pressure, viewing short-term rallies toward 1.35 as selling opportunities amid persistent U.S. dollar strength and range-bound trading.

The British pound has fallen significantly against the U.S. dollar again during the trading session on Thursday, but what I am paying the most attention to at the moment is the fact that we are getting close to the 200-day EMA. The 200-day EMA obviously is an indicator that a lot of people pay attention to, and about two weeks ago, it offered significant support in this market. The British pound continues to struggle against the U.S. dollar, like many other currencies.

This comes despite the fact that interest rates are expected to be cut in the United States. And obviously, traders would look at that as a potential negative turn of events for the greenback. Longer term, this is a market that has been sideways since May of last summer and continues to see the area between 1.32 on the bottom as a floor and 1.37 above as a ceiling.
 

Reaching to the Bottom of Range

We are starting to approach the overall bottom, and the question now is whether or not we can break down below the 1.32 level. A break between the 1.32 level and the 1.3150 level shows that there are serious selling pressures out there. And I suspect that would end up being a scenario where traders would look at this as a sign that the U.S. dollar is going to strengthen quite drastically, due to the fact that the British pound has been relatively stable against the U.S. dollar in relation to its contemporaries.

Quite frankly, I'm not trading this pair as much as I am watching it for a tertiary indicator in a market that is solely driven by the U.S. dollar right now. Short-term rallies at this point will more likely than not end up seeing selling pressure near the 50-day EMA and the 1.35 level. The previous uptrend line should offer resistance as well, so I think this remains a market where you are fading rallies.

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