• The British pound has fallen rather significantly to kick off the trading session on Tuesday but has turned around to show signs of life as we now are trying to recapture the 1.28 level.
• If we can break above the 1.28 level on a sustainable type of mood, it’s likely that the British pound could go looking to the 1.29 level, followed by the 1.31 level which is an area that we had seen a lot of resistance at previously.

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Keep in mind that this pair continues to try to rally, and this is mainly predicated upon by the idea that US economic figures have been getting worse as of late. Underneath, the 1.2675 level is an area that we see support multiple times, and it is worth noting that we have bounce from there in the last couple of days.

Expect Choppy Behavior

I think at this point in time it’s probably obvious that you can expect quite a bit of choppy behavior, but that’s typical for the British pound against the US dollar, due to the fact that we are trying to sort out where we are going next, as the US dollar is considered to be a “safety currency”, while the British pound is considered to be a currency that you will take on risk using. Ultimately, if we can continue to rally it makes quite a bit of sense that the market will continue to see people chasing momentum. If we pull back from here, and we break down below the 1.2675 level, then it’s possible that we could threaten the 50-Day EMA. After that, we then have the 200-Day EMA coming into the picture.

Make sure your position size is correct, because quite frankly this is a market that right along with the rest of all the other ones, will probably remain very noisy in the next several sessions, as we try to sort out what’s going on with the global economy. As there is so much uncertainty, we will continue to see volatility.

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