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GBP/USD Daily Outlook - July 22, 2013

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

The GBP/USD pair rose during the session on Friday, as you can see smashing through the 1.5250 level. This is an area that I have suggested that would be resistive enough to keep the market down, but if it did not we could be going much higher. You can see that the market is currently pressing up against the highs from early July, so I think that this market breaking above 1.53 will remove all doubt, and send us looking for the 1.55 handle.

I am not a big fan of the Pound in general, but this move is pretty stout, and therefore I will be arguing with that. The 1.55 level should be rather resistive, but quite frankly I think the 1.5250 level was going to be more formidable. We could be seeing the beginning of a significant move higher, but again you have to keep in mind that the Forex markets are running on fairly low liquidity at this time of year. On top of that, the Forex markets tend to be very headline driven at the moment, and as a result the wrong headline could move the markets erratically.

GBP/USD Chart July 22

1.55 is my target for now

I think a simple move up to 1.55 is achievable without too much fanfare. After all, once we break the 1.53 handle, it's only two more handles up to that level. It's a nice round number to shoot for, and a lot of traders will be attracted to it. Whether or not the sellers stepped in in large amounts would be a different question, but right now I have to assume that the markets will continue to be a right and choppy overall. When I say that, I don't mean just this market, but most markets.

I also believe that the 1.55 level would be an excellent place to see a nice selling opportunity if we get the right resistive candle. So in a sense, I have a long bias, with a short bias wrapped around it.

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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