The GBP/USD pair continued its bullish move on Tuesday, breaking above the 1.7150 level. The action from the Tuesday session suggests that the market is in fact going to continue going higher, as we try to get to the 1.75 level. That is the next major resistance area at our opinion, and we do think that it’s only a matter of time before we get there. However, with Thursday being the nonfarm payroll number day, we think that the market might be a little bit quite between now and then. To be honest, we are bit surprised that the bullishness that we’ve seen in the first two sections of the week. However, that could be construed as a massively bullish sign for the British pound in general. After all, if we know that there is a major announcement coming out on Thursday, and the market continues to climb anyway, that of course is pretty impressive.
Pullbacks at this point in time should be fun as buying opportunities, and we think the 1.70 level is the “floor” in this market. With that, the market should continue to provide plenty of buying opportunities going forward, and most certainly it cannot be sold. In fact, we have no interest in selling this market until we get below the 1.69 level, something looks very unlikely at this point in time. The move below there of course would be a massively bearish sign, but even at that point in time we believe that there would probably be various bits of support here and there.
On the other hand, the move higher should be rather choppy once the market settle back down. That’s only because of the nature of the Forex markets themselves lately, not the British pound necessarily. The British economy seems to be coming out of recession, so that of course is going to be good for the currency in general, and we do believe that the markets are going to reward the Pound with more and more demand. This will be especially true as both Europe and the United States seem a bit shaky at the moment
