The GBP/USD pair fell during the session after initially going back and forth on Wednesday, as the market looks ready to continue going much lower. With that, we are very negative and recognize that the GBP/USD pair may go as low as the 1.60 level now, as it is the next large supportive area. With that being said though, if we could get above the very negative candle that we formed on Tuesday, we would be buyers. Until then, we believe that selling short-term rallies will be the way to go going forward in this pair.
Keep in mind that the Bank of England does have an interest rate announcement today, so there will more than likely be quite a bit of volatility. However, we believe that the market could end up being a nice opportunity for sellers to step back into play if we do get a little bit of a bounce. On the other hand, we could just go straight down and break the bottom of the range from the Wednesday session. If we do that, we of course would be sellers as well, as the market has certainly decided that the British pound needs to be sold off.
On top of that, you have to keep in mind that the Scottish are possibly looking into voting for independence, and as a result we feel that the British pound will continue to have pressure put upon it until that vote comes out, in a couple of weeks. We believe that every time the British pound rallies, there will be people looking to sell it as the trend is most certainly obvious to most people, and we also recognize that most people favor the US dollar overall at the moment, so of course it makes sense that we would continue to see strength in the greenback.
With the jobs number coming on Friday, we could get a little bit of a bounce in the value of the US dollar anyway, so having said that we are very negative of this market and will continue to be for the foreseeable future.
