The GBP/USD pair rose during the session on Tuesday, breaking well above the shooting star from Friday, however, there will probably be a bit of resistance of the 1.63 handle, so those of you that are a little bit more conservative may wait into we break above there in order to start buying. However, if you are little bit more aggressive the breaking of the top of the shooting star from the Friday session is reason enough to start buying. Quite frankly we feel that this market is going to continue to go higher, and that makes a lot of sense considering that the nonfarm payroll numbers were such a disappointment during the Tuesday session. After all, the Federal Reserve has already stated that the employment situation is the biggest concern right now, and will they as a result won’t be able to taper off of quantitative easing anytime soon.
Because of this, we feel that this market will continue to go higher, and any time it falls back in the short term charts it will be offering a buying opportunity. In fact, we feel that this market will more than likely head towards the 1.65 handle first, and then possibly the 1.70 level after that. We don’t expect this market to move straight up, there will be pullbacks. Those pullbacks should continue to offer buying opportunities over the longer term, and as a result that’s exactly what we will do: buy this market every time it falls over the course of the next several weeks.
Once we break out of the recent consolidation area 1.63, we feel that this market will more than likely continue to be bullish as the European economies in general seem to be doing better overall. That of course has an effect on the United Kingdom, as the United Kingdom trades so much with the European Union anyway. That’s one of the biggest reasons we like this pair, because it is sort of a backdoor way of playing the European recovery, while still being able to sell the US dollar.
Written by FX Empire