The GBP/USD pair fell during the course of the session on Monday, as the downtrend continues in this very bearish market. However, the 1.50 level is of course a large, round, psychologically significant number. On top of that, there is a significant area of support just below that extends all the way down to the 1.48 level. Because of this, even if this pair does fall it’s going to be very difficult to short and with that in mind, I am actually looking for a buying opportunity.
A supportive candle on shorter-term charts might be the signal to start buying, and perhaps that the market will bounce to the 1.53 level. With that, I would be a buyer but only with a small position as it is most certainly countertrend. The 1.53 level above is massively resistive in our opinion, so if we break above there it’s likely that the market will then head to the 1.55 level which I see as even more resistant.
The downtrend is still certainly in effect
I believe that the downtrend is most certainly in effect, as the British pound continues to fall against the US dollar. On top of that, the US dollar is the most favored currency in the Forex markets, so having said that, I believe that any short-term buying opportunity is going to be just that - short-term. However, the US dollar is a currency that’s going to be very difficult to short overall, so you have to keep in mind that the heavier positions should be favoring the US dollar overall.
However, when we get to the 1.55 level, if we can break above there we would imagine that the downtrend would be starting to turn again. On the other hand, if we get down below the 1.48 level, we would become massively bearish and start adding to our position massively as the market should then head towards the 1.45 level next and would be absolutely broken at that point in time.
