- The British pound is under attack on Thursday.
- When you look at the daily chart of the British pound, you can see that we immediately started selling off on Thursday.
- It is probably worth noting that UK bonds have seen a sharp return.
This seems to be causing concern in the UK in general. That being said, the British pound is still, in my estimation, the second best when you’re talking about currencies to trade. So while the British pound will struggle against the US dollar, I don’t necessarily like the idea of shorting sterling against everything. I think you have to be very selective about it. That being said, Friday’s session features the US Non-Farm Payroll announcement, and that will obviously have a big impact on volatility and what happens to the US dollar in general.
Caution is necessary
So you have to be very careful with that. But what I’m hoping is to see this market bounce back a bit so I can step on it and start shorting again. I would be very interested in a short near the 1.25 level if we get that much, but we can only bounce to the 1.2350 level. You’ll just have to watch the action to see how it performs.
All things being equal, I think we have a scenario where traders will continue to look at this as a very volatile market and favor the dollar, but that doesn’t necessarily mean this is a market you want to sleep on. I think that even though the British pound is weaker against the US dollar, many times you can use this chart as a gauge for something like the pound against the Swiss franc or the pound against the Canadian dollar. As long as the chart looks like this, it just proves that the only thing you can really own in the Forex world right now is the US Dollar, and if we break below the bottom of the candlestick from Thursday’s trading session, look below, we could be looking at a drop to 1.20. And I actually think that will happen if there is enough time. But I expect the British pound to struggle at least somewhat. So look for cheap dollars, look forward to a little bounce, then show signs of exhaustion before you start selling.
Ready to trade the GBP/USD Forex analysis? Check out best forex trading company in uk worth using.