The GBP/USD pair fell during the session on Thursday, but only after banging around for some time. The session was essentially flat, the selloff being very minor. That being the case, I have to look at this chart and recognize the fact that the 1.66 level looks to be rather supportive. In fact, I believe that the 1.66 level begins support all the way down to the 1.65 handle, which should be even more supportive. I think it’s rather best to think of this as a “thick” zone of support, and looking for a supportive candle in that general vicinity is exactly what I’m trying to do.
I haven’t seen one yet obviously, but I do recognize the fact that we are slowing down as far as selling is concerned. In a market that is in an obvious uptrend, I have no interest in selling at all, and I believe that this market will eventually go much higher, and believe that the 1.70 level will be targeted fairly soon.
Inflation in the UK?
It appears that growth and inflation is starting to return to the United Kingdom, albeit slowly. However, in a world where growth is almost nonexistent, this is enough to get money flowing into the country in order to take advantage of even the slightest hint of possible profits. Simply looking at the chart tells me that the British pound should continue to strengthen, and the fact that it has done so well against other currencies tells me that although the US dollar may give it a few problems, the British pound could very well be one of the strongest currencies out there.
If you do not wish to trade this market, and think that perhaps it’s a bit too choppy, you can use it as a tertiary indicator for other British pound related markets. For example, you could go long the GBP/CAD pair, the GBP/JPY pair, or the GBP/AUD pair based upon how the British pound is faring against the US dollar. Simply put, if it’s going higher, it should go much higher against these other currencies.
