The GBP/USD pair initially fell during the session on Friday, but as you can see found enough support near the 1.6550 level. With that, it appears that the market is trying to find a little bit of support near this area, as the 1.65 level below has held the market higher. On top of that, the hammer that form for the Friday session suggests that we could try to break out above the several shooting stars that had formed before it. Breaking above the shooting stars would of course be a very bullish sign, and could leave this market back to the 1.67 handle first, and then ultimately the 1.68 handle. Breaking above the 1.68 handle would in fact be a continuation of the longer-term uptrend that I had been following for so long.
There is an uptrend line that had been broken down below previously, as you can see on the chart. That being the case, we could also bounce from here only to see the market grind sideways overall, and at this point I am a bit cautious about going long because of the fact that the pullback has been so drastic. However, I think that a bounce the 1.68 level is reasonable as far as expectations are concerned.
British pound could strengthen overall, but it might not be in this market.
The British pound could strengthen overall, but it might not be in this particular market. After all, the US dollar itself is strengthening and against most currencies, so it’s possible that this market doesn’t perform as well as other GBP related markets. However, the pair might drift higher on a slower type of move. Obviously, we have seen a significant amount of support in this general area, so it makes sense that the buyers could take over. I believe that ultimately the 1.70 level will be a bit too resistive in this environment, but keep in mind that the market will more than likely be choppy between here and there regardless. It is not until we close below the 1.65 level on a daily chart that I would consider selling.
