The GBP/USD pair fell during the session on Tuesday, as the 1.49 level gave way to the sellers. The bearishness in this pair continues, and as a result certainly it's difficult to buy the British pound. However, the candlestick for the Tuesday session ended up being a hammer, which of course is a very bullish sign. Nonetheless, I do not see this as being worthy of buying, simply because the 1.50 level just above looks to be so resistive.
In fact, I actually prefer a bounce here in order to start selling at the 1.50 yet again, if I get that opportunity. If not, I would be justice likely to sell this pair on a break of the bottom of the Tuesday hammer as it would show resistance being broken again. I simply do not go against trend like this, but do recognize the fact that a bounce is very likely sometime in the near-term.
New Bank of England head
The new Bank of England Chairman Mark Carney has already suggested that he is going to be ultra-easy with monetary policy. Because of this, the market will certainly try to front run anything that he's going to do, and as a result long wait until the July 1 starting date that he has. With that being the case, we have obviously seen a mass selling of the British pound, and we think that British are about to become the Western version of the Japanese. In other words, they are perfectly fine with the distraction of their currency at this point time. Case in point: several MPC members are suggesting that loosening of the inflation policy of the Bank of England will be necessary. In other words, they do not fear inflation which of course comes from a weaker currency.
There essentially going down the same road as many of the other central banks around the world, except the UK numbers are absolutely horrible lately. With that being the case, the Sibley no good reason by the British pound at the moment and the run to the US dollar should continue. This is especially true as long as the economic numbers out of America are relatively decent, which of course they still are.