Investing.com - Financial Markets Worldwide
⭐ Start off 2025 with a powerful boost to your portfolio: January’s freshest AI-picked stocksUnlock stocks

Is the British Pound Setting Up for a Short-Covering Rally?

ByThe Pattern, Price & Time Report
AuthorJames Hyerczyk
Published 03/13/2012, 08:19 AM
Updated 05/14/2017, 06:45 AM

The March British Pound turned its main trend down on the daily chart when it took out a pair of swing bottoms at 1.5645 and 1.5641. Since the market appears to be slightly oversold, there was no acceleration to the downside which may mean the currency is setting up for a short-covering rally.

Standing in the way of a breakout to the downside was an uptrending Gann angle/50 percent retracement support cluster at 1.5612 and 1.5607. The actual overnight low is 1.5610, suggesting that short traders either took profits or counter-trend traders started to go long at the cluster.
Daily-March-British-Pound-Chart
Currently, the British Pound is ping-ponging between a pair of 50 percent price levels at 1.5671 and 1.5607. These prices should act as pivots with the market gaining strength over 1.5671 and weakening under 1.5607. Breaking away from either price level could trigger strong moves since the chart pattern suggests room to rally and room to break.

A breakout over 1.5671 could trigger the start of a rally all the way back to 1.5777 while a breakdown under 1.5607 could ignite a trade down to 1.5516.

An improving U.S. economy helped fuel last week’s late sell-off so additional positive economic news this week should be the catalyst that leads to further weakness. Technically oversold conditions may drive the market higher unless an unexpected weak U.S. economic report encourages short traders to pare their positions.

Latest comments

Loading next article…
Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.