The GBP/USD pair tried to rally during the session on Thursday again, but struggled just below the 1.55 handle in order to form a relatively negative candle. More importantly than the shape of the candle is the fact that we failed at the 1.55 handle. That was an area where I had anticipated seeing quite a bit of selling pressure based upon the big figure itself, and then of course the 100 day exponential moving average approaching it. Adding to the possibility of selling pressure is the fact that the area was previously supportive, and should now be resistive based upon basic technical analysis.
With that, I like selling this market in this general vicinity and as long as we stay below the 1.55 level I don’t see any reason to start buying this market. In fact, I believe that we will more than likely head to the 1.53 level below as the area show signs of support.
Continued bearish pressure, but larger consolidation
I believe that we will continue lower over the longer term, binds only so far. Ultimately, I think there is more or less larger consolidation in this region, probably heading down to the 1.53 level, and then possibly even as low as the 1.50 level given enough time. Looking at this marketplace, it appears that we are going to continue to see selling pressure all the way up to the 1.58 level, as I think the 1.55 level is essentially the beginning of a “zone of resistance” that the market will struggle to overcome. After all, even though the British pound is doing fairly well over most currencies, this is the greenback that we are talking about which of course is the most favored currency in the Forex world right now.
It’s very possible the may have to trade off of short-term charts, because no particular move that I see potentially happening in this general vicinity would be of any real great length in time. Short-term moves are probably what we will see, so I will focus on the short-term charts.
