By: DailyForex.com
The GBP/USD pair initially tried to rally during the course of the day on Thursday, but as you can see found more than enough resistance of the 1.50 level to turn things back around and fall significantly. Because of this, it looks as if the British pound is making a fresh, new low, and therefore should continue to go much lower from here. After all, the next major support level is down at the 1.45 handle, so that is my target. However, I don’t necessarily think that it is going to be a straight shot down to that area.
The US dollar continues to be the strongest currency in the world, and the British pound of course isn’t going to fare any better against it than most other currencies. Granted, I’m not looking for some type of massive meltdown, I just believe that the strength of the US dollar should continue going forward.
Selling Rallies
The 1.50 level above should now be the ceiling in this market, and as a result I’m looking for any type of short-term bounce as a potential selling opportunity. The 1.50 level should continue to see sellers as it is a large, round, psychologically significant handle, and as a result I have no interest in buying. I believe that the pair will continue to go lower but in a very slight and grinding manner. I believe that it’s only matter of time before we go lower, but I’m not looking for massive moves. This time year does not lend itself to see stable marketplaces, and as we get into next week that will definitely be the case. With that, you may want to keep your positions a bit smaller than usual, just in case you get some type of “melt up” in a low liquidity environment. Ultimately though, I see no reason to buy this pair and I do believe the 1.45 is calling.
