The British pound rallied slightly in quiet Wednesday trading

The British pound rallied a bit during the trading session on Wednesday, reaching towards the 1.3650 level again. This was an area that held support previously, and of course was just below the major uptrend line. On the daily chart, the 200-day SMA is somewhere in that area as well, so there are plenty of reason to think there could be a bit of support here. However, it’s not until we get above the 1.38 level that I’m convinced we have turned around completely. There is still a high probability of the previous uptrend line offering resistance, especially if the jobs number in America is strong. This will put upward pressure on interest rates in America, and that of course drives of demand for the US dollar.

If that selloff happens, we will probably go to the 1.35 handle, and perhaps even lower than that. Ultimately, I believe that this market will continue to be very noisy, but the next couple of sessions will decide where we go for the next several months. Because of this, I believe that this jobs number on Friday is going to be one of the biggest announcements this year when it comes to the GBP/USD, perhaps eclipsed by only the negotiations between the United Kingdom and the European Union. However, I think this jobs number could determine where we go for most of the summer. Thursday will be rather quiet more than likely though.