British pound falls initially on Tuesday but find support

The British pound broke down significantly during the trading session on Tuesday but has bounced significantly since then as the 1.32 level has offered a bit of support. Overall though, we are in a downtrend and we have broken down significantly below a massive uptrend line. I think that we will eventually reach down towards 1.30 level underneath, which is a large come around, psychologically significant figure and of course has been structurally important more than once in the past. I believe that selling rallies continues to be the best way to deal with this market, and therefore I think that we will eventually find reason enough to go short.

The massive amount of bearish pressure that we have seen as of late should continue as interest rates in America climb, which of course is strong for the greenback, but that same time we do have an interest rate hike coming from the Bank of England within the next year. That keeps this thing for melding down, and that’s why the British pound has fallen against the US dollar, although not as rapidly as the Euro has. Nonetheless, this is most certainly a negative sign and a negative market that you should be trading with the bearish attitude. I believe the 1.30 level will be a major support barrier though, so expect some type of bounce from that area. It’s not until we break above the 1.35 level that I would consider buying.