(MENAFN- Daily Forex) The gbp/usd demonstrated strength in Thursday's trading session, experiencing a rally. However, the market is currently trapped within a significant consolidation area, with the 50-Day Exponential Moving Average (ema ) acting as immediate support. The level at 1.2350 is expected to provide further support, while resistance can be found at 1.2550. Given the ongoing noise and volatility, it is crucial to approach this market with a focus on short-term trading strategies.
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read full review get started The British pound remains highly sensitive to risk appetite, and the upcoming Federal Reserve meeting carries considerable weight in shaping market sentiment. Traders will closely monitor whether the Fed will continue to tighten monetary policy or take a pause. Recent unexpected moves by the Bank of Canada and the Reserve Bank of Australia, tightening their monetary policies, have injected additional volatility into the market. This sudden shift has alerted market participants to the seriousness of central banks in combating inflation. The implications of this development will be interesting to observe and may impact the British pound's movements.However, it is essential to note that the market is still confined within the same consolidation area that has persisted for some time. As such, sideways and choppy behavior is anticipated. This pattern is likely to persist over the next few trading sessions. Consequently, short-term range-bound traders are likely to find opportunities in this market, as holding onto trades for an extended period proves challenging. Market participants lack conviction, and until that changes, remaining nimble is crucial. Pay Attention to Your Position SizingRegardless of the direction the market takes, proper position sizing is paramount. The market's erratic nature and lack of sustained momentum require traders to be cautious and adapt their position sizes accordingly. It is prudent to focus on managing risk and being prepared for potential price swings.In the end, the British pound finds itself in a consolidation phase, prompting heightened volatility in the market. Traders will closely monitor the upcoming Federal Reserve meeting, which will influence risk sentiment and market dynamics. While the recent actions of other central banks have introduced uncertainty, the current consolidation pattern is expected to persist. Short-term range-bound traders may find opportunities within this environment, but it is crucial to remain agile and adjust position sizing accordingly. As market conviction remains lacking, it is imperative to approach trading with caution and prioritize risk management strategies.Ready to trade our daily forex analysis ? Here are the best regulated trading platforms uk to choose from.
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