GBP/USD went back and forth during the course of the session Friday, as you continue to grind sideways in general. This market seems to be trying to form some type of base, and it makes sense that the market would be doing so consider that we are just above the 1.50 level, which of course is massively supportive. Ultimately, that area has support all the way down to the 1.48 level as well, so it’s really difficult to imagine selling in this general vicinity. I truly believe the people are simply buying this pair on the dips, and are ready to push it higher. In fact, I have no interest in selling until we break down below the aforementioned 1.48 level, which is something that would take quite a bit of effort at this point.
Remember, even though the EUR/USD pair has broken down, that is based upon the Euro itself and not necessarily the US dollar. Everybody knows if the US dollar is strong, but the European Union has quite a bit of problems to deal with at this moment in time that the United Kingdom simply does not have to deal with.
Forming a base?
This market looks as if it could possibly be forming a base, so it’s only a matter of time before we bounce enough to start buying again. Ultimately I feel that this market will probably bounce all the way to the 1.55 level which of course was previously so supportive. That will have to be tested for resistance, and very well could show resistance. But ultimately I am the longer-term charts to me it appears that we are at a major bottom, but those never happen overnight, and generally are very volatile affairs. Bouncing back and forth between here and 1.55 level would not be a big surprise me over the longer term, so as this market develops, I will have to adjust my strategy. However, at this point in time I am buying dips on short-term charts should continue to chip away at this marketplace to the upside.
