British pound breaks down on Wednesday

The British pound has broken down significantly during the trading session on Wednesday, as we have reached towards the 1.33 level underneath. I think at this point, it’s likely that we will continue to drive lower, as the US dollar of course has rising interest rates behind it, and of course there is a lot of concerns when it comes to the United Kingdom in general as it departs the European Union. I believe that the market will ultimately go looking towards the 1.30 level underneath, but we may bounce a couple of times between now and then. I think that the market will continue to favor the US dollar overall, but we are a little bit oversold, so the bounce may come rather soon.

I believe that rallies at this point should continue to be opportunities to get short of this market, as the bounce would offer “value” in the US dollar. I believe that the market continues to be bearish regardless, as the 1.35 level now continues to be a massive “ceiling” in the market. I think that we will ultimately go to at least the 1.30 level during the summer, but obviously we will have the occasional bounce. Overall, I think that the US dollar is the main driver of this pair, as it is one of the favored currencies around the world.