The GBP/USD pair rocketed higher during the course of the day on Friday, breaking above the 1.50 level. However, the area above the 1.50 level offered so much resistance that the market turned back around to form a perfect shooting star. If we can break below the bottom of the shooting star, I believe that this market will then head to at least the 1.48 level next, if not lower than they are, perhaps heading to the 1.46 level. I believe that this market will continue to fall from here, as the longer-term trend is so strong. However, this bounce has been fairly interesting, but I think it is just simply a bit of a relief rally and the fact that we could not hang onto gains above the 1.50 level tells me that the buyers simply do not have the strength to hang on to this market.
1.52
It’s not until we get above the 1.52 level that I feel the market will be “safe” enough to start buying, which is something that I would be a bit surprised to see after the signs of weakness that appeared on Friday. I believe that given enough time, this market will head back down to the 1.45 level and below. I do believe that the 1.52 level is massive in its importance, and as a result I will certainly be paying quite a bit attention.
I think that it’s only a matter of time before any rally get sold off, so quite frankly even though I have missed the upward mobility of the British pound recently, I feel that the longer-term story is still in a fact, and it’s only a matter of time before we get the sellers interested yet again. After all, the US Dollar Index looks as if it is ready to bounce, which of course should work against the value of the GBP/USD pair going forward. Ultimately, I believe that the US dollar continues to be the asset everybody wants to own longer-term.
