The British pound deals with the "line in the sand" around 1.97ish. So far it's bounced off of it. But notice that all of the recent peaks have been lower.
So what seems to be a near term victory for the pound may not be so pretty the next time it deals with the black support level below around 1.9700.
If that level breaks, "look out below".
What could trigger the GBP/USD? If we got a strong ISM Non-Manufacturing (Services) report or if we got a strong Non-Farm Payroll report. Improvements in either of these two reports could be enough to do it.
The ADP employment report improved today. So there's a chance for an improvement in the NFP report on Friday. While I think that employment is headed lower overall in the coming months, sometimes employment data does "tick up" on its way overall downward (just as downtrends on charts do).
So keep an eye out for this over the next couple of days. There's not hardly any currencies that the buck has gained ground on ...but the pound is one of those currencies. So it has a chance to push it below 1.9700 and even lower.
The pound holds for now, but will it upon the retest of 1.9700?
Sean Hyman
Currency Director
The Sovereign Society
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