British pound bounces hard after initially selling off on Wednesday

The British pound has broken down initially during the trading session on Wednesday but has found enough support just above the 1.40 level to continue climbing. After all, we have been in a strong uptrend for some time, but recently we have been very choppy, and when I believe is an attempt to form some type of basing pattern above the 1.40 level. That is a large, round, psychologically significant number, and of course attract a lot of attention. I believe that short-term pullbacks will continue to offer buying opportunities, and with the jobs number coming out on Friday I think that it will be somewhat muted over the next couple of days.

If we did breakdown below the 1.40 level, then I think the market will probably go looking towards the 1.39 level, but I also recognize that there is a massive uptrend line on the daily charts will continue to be something to pay attention to. I think that eventually the market will go looking towards the 1.43 level above, which has been a short-term ceiling, and then the psychologically important 1.45 level above. I don’t think that this is a market that will break down, but clearly you need to pay attention if the overall attitude of the Forex markets, as there are a lot of moving pieces right now in the global economic scenarios that we are playing out. I believe that the 1.40 level is showing a lot of promise for a “floor” though.