The GBP/USD pair had a back-and-forth session on Tuesday, ultimately settling on something along the lines of a hammer. This hammer sits at roughly the 1.7050 level, which I see is the beginning of support extending all the way down to the 1.6950 region, with of course the 1.70 level as the focal point. With that, I don’t see any reason to think why this market won’t find support down there, so even if we drift lower from here, I will be looking for buying opportunities in the form of supportive candles.
That being the case, I am essentially “long only” of this pair, as I have been for some time. I think that a bounce from here, whether it be from just below or a break above the top of the hammer for the Tuesday session, sends this market looking for the 1.72 handle first, and then ultimately the 1.75 handle if we can break out above there which of course is my longer-term target.
Nice trend, and we did have an impulsive move.
This is been a nice trend for some time, and we did have an impulsive move to get to the 1.70 handle in the first place. Quite often, we need to test that area for support again, and as a result it’s not a surprise that we have pullback a little bit. However, I don’t see that impulsive candle as some type of mistake, and it should continue to support the market. That being said, I do like this marketplace, and I am a buyer on anytime we see supportive candles or an impulsive one that is green.
It’s not until we break below the 1.69 handle that I would consider selling this market, but to be honest that something that I don’t expect to see at this point. In fact, we are heading into the summer markets, and those are typically fairly quiet. With that being the case, I think that this pair will continue to grind higher, but that will be the key word more than anything else: “grind.”
