The GBP/USD pair shot straight up during the day on Wednesday, slamming into the 1.3250 level. This is a market that continues to have a lot of interest in it, mainly due to better than anticipated CPI numbers coming out of the United Kingdom. This of course raises the likelihood of an interest rate high coming out of London, and that is one of the main reasons to buy a currency. I think we are going to reach towards the 1.33 level above, and then eventually to the 1.3650 level over the longer term. That is where the market gapped lower after the surprise announcement that the United Kingdom voted to leave the European Union, and I anticipate that there is a lot of resistance above. I would look for pullbacks at this point though, because quite frankly we have moved so rapidly. The market will more than likely continue to be very choppy, but at the end of the day, I think that the buyers are going to become much more aggressive.
If we do pull back from here, I anticipate that the 1.32 level should be massively supportive, and I think that the short-term charts will probably be where you need to find trades, as given enough time the big-money will go flowing in. However, we have already had an impulsive move during the session, and one would have to think that the inertia is probably falling a bit. If we can break above the 1.3275 level, then the market should go to the 1.3325 level next, followed by the previously mentioned 1.3650 level. I don’t have any interest in shorting this market, I believe that we are starting to see the bullish pressure mounts, and that it’s only a matter of time before we break out.
Written by FX Empire