British pound very noisy during trading on Thursday

The British pound has fallen significantly after initially trying to rally during the day on Thursday, mainly in reaction to the idea that the British were leaving the customs union with Europe, and I think this has a lot of people asking questions. I think in the end it won’t really matter though, and I believe that this pullback may end up being a buying opportunity before it’s all said and done. Short-term traders will probably continue to short this market, but I believe that the 1.33 level will be supportive enough to keep this market alive. If we can find some type of bounce from that level, I think that we will see buyers jumping into this market and take advantage of that value.

Otherwise, if we were to break down below the 1.33 level, that would be very negative sign, and could send sellers back into the market. I think the one thing you can count on in this pair is that we are going to get a lot of volatility over the next several hours, if not days. We have seen this pair bounce quite nicely, but I think that has to do with the US dollar more than anything else. The US dollar had been a bit overbought. I think it’s a simple as that and this bounce has been an opportunity for profit taking by those who have shorted the British pound. Expect a lot of noise, but I would quite frankly stand on the sidelines until we get a bit of clarity.