- The British Pound has fallen during the trading session on Friday, but as you can see, there is a little bit of support underneath.
- So, I think really at this point in time, what we are seeing is a market that's trying to form some type of consolidation area.
- The 1.32 level underneath is significant support, just as the 1.34 level above is significant resistance.
All things being equal, the market is probably going to have to try to grind away in this area to absorb some of those massive gains that we had seen previously. The market shooting straight up in the air over the last couple of weeks, at least until the last couple of sessions, suggests that maybe there might be a little bit of exhaustion in this area, and that makes sense. This is especially true considering that the 1.34 level above was a major swing high. And now it’s putting a little bit of negative pressure on the market in this run.
On a Break Lower
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If we were to break down below the 1.32 level, then we could drop down to the 1.30 level where the 50 day EMA is starting to. Around this is an area that I think you have a lot of noise just waiting to happen in that area, but really at this point we would have to break down pretty significantly to even have that conversation. I think most of the markets are basically in a wait and see mode after the US dollar was sold off so aggressively. And now we are starting to see that maybe there’s a little softening when it comes to trade tariffs and that might actually help the dollar before it's all said and done. Interesting days ahead, but right now I think we're just killing time in this 200 point range.
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