The GBP/USD pair tried to rally during the session on Tuesday, and obviously did so. However, the 1.61 level offered a bit of resistance, and it appears that the market will continue to struggle to go higher. I do believe that we probably will continue for the short-term, but I see the 1.63 level as being massively resistive. With that, I am a bit hesitant to start buying but I would be very interested in selling a resistant candle as it appears.
I believe that ultimately the market should continue to go much lower, as the US dollar continues to strengthen against most currencies. On the other hand though, I am willing to admit that the market could bounce significantly if we go above the 1.63 handle, as I believe that is a bit of a momentum shifting event.
Choppiness ahead.
I believe in the matter what happens, there will be a bit of choppiness ahead for this marketplace. After all, although the US dollar is most certainly the favored currency out there right now, the British pound is doing fairly well in general. Because of that, that might have this market going into a bit of fits and starts from time to time, but ultimately the US dollar strength should continue to be the focus. Because of that, I believe that the market will continue to offer plenty of selling opportunities from time to time, but momentum will shift back and forth. I think this could be one of the more dangerous pairs to traverse in the short-term, and because of that we could have quite a bit of negativity and volatility in general.
If we get down below the 1.58 level, I think this market could come undone. At that point time would not only be a seller but an aggressive one at that. On the other hand, if we got above the 1.63 level, I would be aggressively long of this market. The tween down then though, you can anticipate a whole lot of choppiness and difficult trading conditions.
