GBPUSD hovering around 1.4600 once more

Nearly everyone has settled on the algo/thin liquidity excuse for the overnight move in the pound and I know no different.

The whipsaw took us back to 1.4500 and now we're up and messing with 1.4600 again. The thinning liquidity is partly due to players moving to the sidelines as the volatility rises around the Brexit vote. We've seen what happens over opinion polls and there's many who are not interested in playing in those conditions. The move today is an apt reminder of what conditions we may face in the run up to the vote.

We've got a pretty well defined range to watch, if you want to stay out of the day to day noise.

GBPUSD daily chart

The daily moving averages are well placed to help define the range I'm looking at. The area around the 100 dma (1.4340/50) looks quite strong and that support extends down to the 1.4325/30 and 1.4300 levels. The 55 dma at 1.4403 shouldn't be discounted either.

Above, we can see why the pop pulled up where it did, just below the 1.4665/70 area, as it's been a resistance point a few times this year. The main resistance comes around the May highs and 200 dma.

When markets get a bit screwy we need to recognise the signs early, and these volatile moves are the signs for the pound. If you've been trading a certain way and it's not working now, or you're getting messed around by the moves, it's time to adjust. When that happens to me I go further out on the charts and widen my horizons and pick the levels I believe will have a bigger say outside of the day to day noise. It means you have to be more patient but that's no bad thing to practice. Even if you've been lucky enough to be on the right side of some of these moves, it doesn't mean you should be complacent. They could just as easily go against you. See luck for what it is and not as a trading strategy.