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MENAFN- Daily Forex)
The British Pound showed resilience on Tuesday, rebounding toward the 1.32 level despite choppy trading. Resistance remains near 1.3262 at the 200-day EMA, and while short-term rallies may fade, a close above that mark could shift sentiment.
The British Pound initially fell a bit during the trading session on Tuesday, as we continue to see a lot of noisy trading behavior. That being said, since then, we have seen a little bit of a turnaround, and it looks like the British Pound is going to attempt a breakout above the 1.32 level. The 1.32 level is an area that a lot of people will be watching, as it was previous support and should, at least in theory, have a bit of market memory attached to it and offer resistance.
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It's also worth noting that at 1.3262, we have the 200-day EMA, which comes into the picture as resistance, also. Ultimately, I think the way that the Tuesday session ends up printing the daily candlestick probably tells us a lot, but as things stand right now, there's at least a little bit of fight in the pound against the US dollar. I don't necessarily think this is British Pound strength.
I think it has more to do with the fact that the US dollar was just a little bit soft in the early hours on Tuesday. I do still believe that the Bank of England is going to be cutting rates, although they didn't do this last meeting. The reality is that the vote was very close, and they are leaning in that direction.
Despite the fact that most traders believe that the Federal Reserve will cut rates, they knew that in September, after the first cut, and we've seen the US dollar do nothing but strengthen since then in a general manner. I think short-term rallies like we're seeing now will end up being selling opportunities, but if we can close on the daily chart above the 200-day EMA, then maybe we have to rethink the situation.
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