The GBP/USD pair rose during the session on Wednesday, as I had suggested could happen. However, I also suggested that the 1.50 level we continue to offer significant resistance, not only because of the former support, but also the large round psychological nature of the number. This is exactly what happened during the Wednesday session, as you can see later on we fell and formed a shooting star.
With that being said, there was a hammer that was formed on Tuesday, and this generally means that we are about to see some type of consolidation. I think this is very likely, but eventually this consolidation typically will turn into continuation. We are most decidedly in a downtrend, and I don't see that changing anytime soon, mainly because of the strength of the US economy. While using the word "strength" might be a bit much, it's a relative thing and the British economy is hurting to say the least.
1.45
I believe that we will eventually see the 1.45 level in this pair. It won't necessarily be the quickest move, as it will be very choppy. The easiest part for the sellers has already been done, and now it will be more work to break this pair down. However, I believe that once Mr. Carney gets to London to run the Bank of England, we should see very expansive monetary policy. In fact, that is what the market is anticipating, for his arrival on July 1.
Once Mr. Carney gets involved, we could see an aggressive ratcheting of monetary policy, and we really could see the bottom fall out of the British pound if the does get overly aggressive. From what we've seen recently, it does appear that several of the MPC members are willing to absolutely smoke the currency in order to achieve growth. In fact, I have recently read articles comparing the Bank of England to the Bank of Japan, and possibly even more self-destructive as far as currency value is concerned. MIB a stretch, but nonetheless I do see that we are in a downtrend and it looks very likely to continue. In the end, that's all I need to know.