The British pound rallied a bit during the trading session on Wednesday, reaching towards the 1.34 handle. That’s an area that has a bit of resistance attached to it, but in general I think that the market will continue to be noisy and I look at these pullbacks as value due to the British pound being historically cheap. The 1.35 level will be targeted above, and I think that eventually we will break above there and go looking towards the 1.3650 level. That’s an area where there is a significant gap lower, and if we can break above that I think it’s time to go much higher. That is more or less a “buy-and-hold” scenario just waiting to happen. However, I think that we have a lot of work between now and then, so it’s likely that we will continue to see a lot of choppiness. Because of this, I plan to add slowly to my position as it works out in my favor, and I think that you are probably better off being as patient as possible with this pair, and thinking of it as more of an investment than anything else.
If we were to break down below the 1.33 level, I would rethink things, because this could signal a bit of negativity creeping into the market. However, I think there is more than enough support underneath to turn the market back around. In general, I’m bullish but I also recognize that this is probably a story that will be more for 2018 than anything else. However, there’s nothing to keep you from building your position now.
Written by FX Empire