The British pound bounced somewhat on Monday, as we had sold off of rather greatly alongside the yen on Friday. We did open upwards the week sitting directly on support.
The British pound has rallied somewhat from the Japanese yen early on Monday in order to attempting to wipe out a lot of this losses coming from previous week. Most of those losses came in the form of a rather ugly candlestick on Friday, so at the end of the day that could have been significant profit-taking as we are trying to break above a large, round, psychologically significant figure in the form of the?140 level. If we can buy above there, this market might pull off quite greatly as well as possibly even go looking towards the?142.50 level, and then the?145 amount. This usually takes some risk on type of mindset, but clearly the marketplaces all set to accomplish that on the first hint of news that is good.
To the downside, I feel that this?138 amount will continue to offer considerable assistance, so a rest down below there would be a small bit of a surprise. Beneath there, I’d foresee that a fifty working day EMA comes into play, and possibly much more structurally important, the?136 level. In either case, I like the notion of buying dips still, at least unless we break down below the?138 levels. I really do think that sooner or later we can split away to the upside, however, the question is actually whether or not we have to pull back again significantly to build up the momentum, or will we be able to simply grind eventually and sideways achieve this? At this point, that is genuinely the only question I am asking myself as I have a look at these charts.