The British pound has initially pulled back a bit during the course of the trading session on Wednesday as we continue to see a lot of volatility but possibly a recovery as well. The 1.40 handle is just above, where the 50 day EMA is currently hanging about. If we can break above the 50 day EMA, then it is likely that we are going to go looking towards the 1.42 handle, an area where we have seen a lot of noise previously. Ultimately, this is a market that I think is somewhat range bound and trying to build up a bit of momentum to finally break out.
GBP/USD Video 24.06.21
Keep in mind that the top of this little range is essentially the same as a major resistance barrier going back quite some time. It is because of this that we need to see massive US dollar selling in order to see this pair go higher, and this could be the range that we are essentially stuck in for the rest of summer. That being said, we are essentially in the middle of the range but the trend at the moment is most certainly to the upside.
Ultimately, the 200 day EMA is racing towards the 1.37 handle, so I do think that we are well supported underneath just as we are seen the market show signs of resistance. Expect a lot of choppy and noisy behavior, especially as the United Kingdom looks as if it is going to continue the lock down, which of course is not good for the economy. All things been equal though, this is probably more about the dollar than anything else.
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