The GBP/USD pair rose during the session on Wednesday, proving that the market seems to want to hang out between the 1.55 level on the downside, and the 1.5750 level on the upside. That being the case, I feel that the market is more or less a short-term trader’s playground, and because of that I'm not a big fan of it at the moment. However, if you are more inclined to trade short-term markets, this might be an excellent opportunity for you as the range is clearly defined.
Because of this, you may want to look towards the short term charts in order to find supportive candles to start buying. I do think though that it's going to be almost impossible to break the resistance as it is so strong, but that remains to be seen. I think that the Federal Reserve and its decision on whether or not to taper off of quantitative easing will have a massive effect on this market, just as it will with anything involving the US dollar right now.
Two weeks of choppiness
With all that being said, I believe that we are about to see two weeks of choppiness until the Federal Reserve does in fact make the decision. Headlines of course will move the markets around as traders try to "get in front of the markets." As to that that announcement is made though, I feel that we can see a real trend come back into the marketplace. Adding to that move will be the fact that the big money traders will be coming back from their holiday, adding to the liquidity and certainly wanting to put their stamp on the marketplace.
A lot of times, they tend to start driving the markets in the direction they wish to see them go for the rest of the year when they come back from summer break. Because of this, I think that as soon as we see a breakout of this consolidation area, we will more than likely see a strong move that can be followed for a longer-term trade.
