The British pound has rallied during the trading session on Thursday to reach towards 1.42 handle, in a sign that perhaps the pressure is starting to mount or a move to the upside. Ultimately, the market breaking above the most recent high could open up the possibility of a move towards the 1.44 handle, and then eventually the 1.45 level which is my longer-term target. Short-term pullbacks at this point in time should continue to see buyers coming into pick up value as it appears, with the US dollar most certainly on its back foot, with the British pound being the main beneficiary.
When you look at the longer-term charts, the 1.42 level has been crucial more than once. If we can break out above that area, then the market will have cleared a major resistance barrier. The fact that we are pressing the situation so drastically and so relentlessly suggest that we do have plenty of buyers underneath and we are eventually going to try to get momentum picking up to finally make that bigger move. The British pound has been bullish for some time, and it is worth noting that recently we had seen a bit of consolidation to work off the massive froth that had been built up in the market. That being said, I think that the overall attitude of this market continues to favor the upside, so I look at pullbacks as potential value and I do believe that the 1.40 underneath is significant support that we will not be able to break down below anytime soon.