The recent ascent in the British Pound has lifted futures near 1.6800 in June?challenging?the highs from mid-February. This has been a steady climb since bottoming in July of 13′ but what I?find?interesting looking at the weekly chart?below?it appears the line in the sand is just?above?that level, as?every time when futures have approached this price point we’ve?failed. While past?performance?is not?indicative?of?future?results I feel scaling into bearish trade at current levels makes sense weighing risk and potential?reward. ?
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A?settlement?above the?trend?line I drew on the daily chart one should?admit he/she is wrong. I have?a first objective?at the up sloping trend line as seen on the daily chart below that comes in near 1.6575. Another?consideration?is the?greenback?has traded lower 5 out of the last 6 days giving up 1.5%?dragging?prices to oversold levels. If?support?does hold as it did in mid-March and we get a bounce?in the?near term to MAs I?would?expect?this to contribute to weakness in other crosses. To be clear I am?not calling a bull?market?in the US dollar nor a bear market in the Pound but?rather?a trade to play?a?correction.??
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Weekly British Pound:
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Daily British Pound:
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