The British pound has fallen a bit during the course of the trading session on Thursday but has also found a bit of support as we continue to bang around the 1.35 handle.
The British pound has fallen a bit during the course of the trading session on Thursday, after forming a massive shooting star on Wednesday. At this point though, we have not found the follow-through to the downside that one would hope to see if you were bearish. At this point time, the market is likely to continue to go back and forth between now and the jobs report on Friday, so please keep that in mind. Ultimately, this is a market that is squeezing between a couple of major moving averages at the same time, so that also could have a little bit of technical influence on where we are.
GBP/USD Video 07.01.22
To the downside, we have the 50 day EMA hanging about the 1.3433 level and turning higher, while the 200 day EMA is sitting just above the 1.3575 level and flattening out. As we are between the two moving averages, you have different people on different time frames look at this through the prism of whether or not we are going to continue the longer-term downtrend or are we trying to change things. If we can break above the 200 day EMA, then it is likely that the market will change its overall longer-term trend, rallying yet again to go much higher.
On the other hand, if we break down below the 50 day EMA it is likely that we could go looking towards the 1.32 level again, although clearly over the last couple of days it looks like we are fighting that type of move. Ultimately, by the time we get done with the Friday session we may have a little bit more in the way of clarity.
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