The British pound initially spiked higher during the trading session but found the 1.42 level to be far too resistive. This was a target that I had for some time, but unfortunately did not have the opportunity to buy a pullback. I do believe that given enough time we could see an opportunity, but I think the way we have reacted during the trading session and the fact that yields are spiking in the United States suggests that we will eventually get an opportunity underneath. The 1.3750 level underneath could be massive support as well, and then I think we would find buyers.
GBP/USD Video 25.02.21
On the other, if we were to break above the top of the shooting star, then the market is ready to go much higher. I do not like that move though, because we have gotten far too ahead of ourselves but at this point in time, I am more than willing to jump in on the pullback. If we do break above the top of the candlestick for the trading session that would make me a bit nervous, because quite frankly a “one-way bet” is going to cause major issues.
I think the one thing you can probably count on is going to be volatility more than anything else, and therefore as we have gotten a bit parabolic, I think that the trading session on Tuesday was the “first shot across the bow” for the market and therefore I think if you are patient enough you should find an opportunity to take advantage of the longer-term trend again. The meantime, you are probably better off simply sitting on the sidelines.
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This article was originally posted on FX Empire