The GBP/USD pair initially fell during the course of the day on Monday, but found buyers shortly after the open to push the market back towards the 1.55 handle. The 1.55 handle is significant resistance, and as a result I am looking for some type of resistive candle in order to start selling. That resistive candle would be a nice selling opportunity as I believe this market will continue to bounce around between the 1.55 level on the top, and the 1.52 level on the bottom. I think that there is enough resistance above the 1.55 handle that we should see selling pressure all the way to the 1.58 level, so therefore it is only a market that I would consider buying after the 1.58 level is clear to the upside. Until then, I am only looking for selling opportunities.
US dollar is King
The US dollar is by far the strongest currency in the Forex markets as it continues to strengthen overall. While the British pound itself isn’t in bad shape, the truth of the matter is that the US dollar is one of the few currencies that people are buying hand over fist. Because of this, I think it’s only a matter of time before we break down in this pair, and the fact that we have 300 pips worth of resistance just above certainly doesn’t change my opinion about that either.
The 1.50 level below is a massive floor in this market though, and with that it’s only a matter of time before the buyers step back into this marketplace in that general vicinity. I would be willing to buy a supportive candle down there, but in till we do get that or the breakout above the 1.58 level, I am not even remotely considering going long in this marketplace mainly because of the US dollar, not necessarily the British pound. In fact, I think buying the British pound against other currencies is very much possible, but in this particular case the dollar remains King.
