The GBP/USD pair rallied during the bulk of the session on Wednesday, testing the 1.57 level. That being the case, the market pullback a little bit but it looks like the ready to grind in this general vicinity. We think that it’s only a matter of time before the market see sellers come back into play, as the British pound will continue to suffer against the US dollar. After all, the US dollar is without a doubt the strongest currency in the Forex world right now, so it’s hard to short the US dollar against anything.
The pair looks as if it’s ready to fall to the 1.55 level, which is the next large, round, psychologically significant number. That being the case, I’m looking to sell this market every time it rallies going forward, as the US dollar continues to show it strength.
61.8% Fibonacci retracement
The fact that we have broken down below the 61.8% Fibonacci retracement level tells me that this market is more than likely ready to go much lower. Because of that, I will continue to short this market over the longer term. It appears that the British pound is going to follow the same path as the Euro, as it continues to suffer against the US dollar based upon US dollar strength. Ultimately, the market should provide plenty of selling opportunities going forward, and both short and long-term traders will continue to favor the Dollar in my opinion.
Any rally this point in time will be ignored by me and until we get above the 1.60 and which looks to be massively resistive. If we did get above the 1.60 handle though, I would have to start thinking about a potential trend change, but at this point time that looks very unlikely. The marketplace seems to have made up its mind, and as a result I am looking to continue buying US dollar strength. In fact, I believe the US dollar is without a doubt one of the few assets that you can own right now, either in the Forex markets or the futures markets via shorting commodities.
