The GBP/USD pair broke higher during the course of the day on Wednesday, clearing the resistance that we had seen recently, and tested that the 1.58 level. I believe that the market will see more significant resistance near the 1.60 handle, so at that point in time we are more than likely going to see resistance in that area that could turn this market back around I like shorting this pair, although I don’t necessarily think of the British pound itself is a particularly weak currency. The reality is that the US dollar is without a doubt the strongest currency out there, so it’s hard to go against it.
Looking at this market, we are obviously in a nice downtrend and I believe it’s not until we clear the 1.63 level that change that. Alternately, if we do then of course I believe that it becomes a “buy-and-hold” type of situation.
Follow the trend
I believe in following the trend anyway, but this is a strong one. That being the case, I don’t see any reason whatsoever in buying this market and as a result we should see sellers step in every time we rally. I essentially am looking for any reason whatsoever to continue selling, because I believe that ultimately we break down much lower.
The US dollar continues to be the one currency that you can’t go against and as a result I’m just not interested in buying this market even though it looks as if we could get a bit of a rally. The rally is probably dangerous to say the least, and as a result I just don’t trust that move higher. With that being the case, the market is one that you can be patient with in order to make significant gains over the longer term. Ultimately, we will have to wait and see whether or not we can break down lower, but I certainly don’t trust this sudden bullishness. On top of that, today is Thanksgiving, so it’s very likely there will be almost no liquidity later in the day anyway.
