British pound rallies during the Thursday session, showing signs of support again
The British pound has pulled back slightly during the trading session on Thursday, but then rallied rather significantly, reaching towards the 1.4250 level. If we can break above there, the market will then go to the 1.43 level above, which of course is an area that is psychologically important due to the round number, but I also believe that a break above that level should send to the market towards the 1.45 level above. That’s an area that will be difficult to overcome, but if we do it’s very likely that we continue to go much higher.
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I believe that short-term pullbacks continue to offer value, extending down to at least the 1.40 level underneath. I like the idea of going in slowly and adding as the trade works out in our favor, because I do believe that eventually with the Bank of England looking very likely to raise interest rates, the British pound will continue to climb. This will be especially true once we get some type of resolution to the negotiations between the European Union and the United Kingdom. Ultimately, the British pound will get it a bit of a relief rally due to some type of certainty if nothing else. Ultimately, I believe that the 1.40 level underneath should be the hard floor in the market, so I like the idea of picking up value when it shows itself.