The British pound has been an absolute nightmare to trade as of late, has anybody who has been involved in this market can tell you. Quite frankly, all it takes is a rumor put out on Twitter, and the algorithms come in and push the market to the moon or break it down significantly. At this point, I think it’s only a matter of time before we have to make a true decision, and with the noise coming out about the Brexit, this is a market that has become completely untreatable unless of course you have algorithms working for you. With that being the case, we are far overstretched and it’s likely that we will continue to see a lot of noise and nonsense, but we are more than likely going to find volume on some type of pullback. If we can find volume, then we can find value. I anticipate that the 200-day EMA is probably where we start to see that.
At this point in time I am more apt to look near the 1.2650 level for value, or perhaps even the 1.25 handle. I have no interest in buying at this level, because it’s so overbought. I get emails about buying the pound now, which is something that should’ve been done 800 pips ago. If you are not long of this market, you have no business trading it.
It’s only going to take some type of negativity to send the British pound back down, because this currency has simply been far too difficult to get involved in. At this point it’s likely that the markets will continue to be driven by the random headline, and I’ve actually watched Twitter with a rumor set this market on fire. I don’t see this changing anytime soon so therefore you need to look at this for more of a longer-term perspective. Given enough time, this should show value, but we need the dust to settle. This means essentially ignoring this pair as although newer traders will look to it for excitement, excitement and profit are going to be two totally different things. That being the case, I look at the British pound is a great place to lose money
