The GBP/USD pair broke higher during the course of the session on Tuesday, clearing the 1.57 level at one point during the day. However, we found the area to be far too resistive, and therefore we gave back the gains that were formed above that level. The fact that we pulled back from there tells me that the market isn’t quite ready to break out yet, and as a result I would fully anticipate seeing this market pullback a little bit to try to build up some momentum. I think that there is a consolidation area between the 1.55 level below, and the 1.57 level just above. I recognize that we have been in this area for some time now, and given the fact that it is the end of the summer, I have a hard time believing that we are going to find some type of massive move in the short-term, but it is most certainly coming at this point in time.
Buying only
I am only willing to buy this pair, as I believe that the market should continue to go higher given enough time due to the fact that there is so much in the way of support. After all, we have the 1.55 level which of course is a large, round, psychologically significant, and of course the 100 day exponential moving average just below there. Also, we have the uptrend line that should send this market higher and as a result I feel that it’s only a matter of time before we go higher. The British pound has been a bit more resilient against the US dollar than any other currency, and as a result it makes sense that this could be one of the few pairs it will work against the value of the greenback.
I believe that the 1.58 level will be targeted, and that if we can break above there we should then go to the 1.60 level given enough time. I believe that it’s only a matter of time before we get to the 1.60 level, although it will be a fight.
