GBP/USD Forecast 29/08: Support Amid Noisy Trading (Chart)

(MENAFN- Daily Forex)

• Thursday has seen a bit of bullish pressure for the British pound against the US dollar, as we continue to see a lot of noisy behavior.
• Ultimately, this is a market that I think is still very much in the throes of consolidation.
• This is despite the fact that we did bounce ever so slightly over the last couple of days. In fact, you can even make an argument that there is a bit of a“double bottom” at the 1.34 level below, but at this point I think it has more to do with a simple lack of momentum.

Technical Analysis

Speaking of the 1.34 level, this is an area that I think a lot of people would be looking at as a potential support level going forward, as it has proven itself to be important multiple times, going back several months. It's also worth noting that the 50 Day EMA sits between here and there, so I think there is a lot of support just waiting to jump into the market.

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However, the 1.36 level above is a significant amount of resistance, an area where we have seen selling pressure previously. If the market were to reach that area, I'd be watching to see if there are signs of exhaustion that I can start shorting. Quite frankly, I think that we are on the precipice of something kind of big as far as the global economy is concerned, and if that does in fact change for a more negative tone, the US dollar becomes much more attractive to currency traders as a form of safety of YearEURUSD Chart by TradingView

Keep in mind that the time of year is typically low volume, so simply sitting in this area makes quite a bit of sense. At this point, if we can break out of this range opens up the possibility of the 200 pip move. If we break above the 1.36 level, it could move the market to the 1.38 level. If we break down below the 1.34 level, then we could drop down to the 1.32 level. The 200 Day EMA is closer to the 1.32 level, so that of course could offer a significant amount of support.

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