The GBP/USD pair broke higher during the session on Thursday, clearing the 1.70 handle again. That area is a major support and resistance level, so it’s interesting that we managed to climb back above again. We are essentially trading sideways overall, but at the end of the day it appears that the market is simply trying to take a bit of a rest after a very impulsive move higher from the 1.68 handle.
The simply candle for the day on Thursday of course is bullish looking, but it really is and until we clear to a fresh, new high that we feel the next leg higher is about to go. However, we do expect that to happen sooner or later, even though it could be a bit of a fight between now and then. The market breaking higher should send this market looking for the 1.75 level, an area that is massively resistible on a longer-term chart as well. It should be noted that this market is decidedly bullish overall, and with that see no reason whatsoever to sell this market. We believe that the 1.69 level should offer a bit of a “floor” in this market, and as a result think that the buyers will continue to come back into the market every time we fall.
Even if we break above the recent high, we suspect that the market will fight back and forth from time to time, as the market should continue to be noisy as the Forex market in general has been for some time. This being the case, the market will more than likely continue to favor short-term traders, but ultimately a longer-term move could be taken advantage of as well, it’s just that it’s going to be very difficult to hang on for a lot of traders out there because of the potential volatility. Nonetheless, we believe that selling is going to be honest and possible, and that every time this market drops, there should be buyers to pick up the pieces as the latest GDP numbers out of the United States certainly suggests that the Federal Reserve is going to continue to be loosening monetary policy.
