By: DailyForex.com
The GBP/USD pair showed weakness again during the session on Tuesday, as the 1.5250 level continues to be far too resistive for the market to move beyond. The end of the session did see a little bit of a bounce, but nothing significant, and certainly nothing to get excited about. This continued the weak view I had of this currency, and as a result I think we will get selling opportunities continually on the shorter time frame charts. I think that rallies will more than likely be those opportunities, and looking at the short term charts such as the hourly chart might be the way to go.
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I think the 1.5250 level will continue to be resistant, and I also believe that we will continue to see the action that we saw on Tuesday: a continual move towards bearishness from this point. The lows from the session on Tuesday of course were lower than the one, Monday, and as a result it shows that we are having more bearish pressure stepped into the marketplace.
United Kingdom's economy is weak
The United Kingdom's economy has been we for some time now, and the economic numbers are a real mixed bag, mainly being negative. That being the case, the United States is the perfect counterweight to that type of sentiment as the US is one of the few positive markets out there right now as far as the real economy is concerned.
The question then becomes whether or not be Bank of England expand its monetary policy. My suspicion is that they will sometime over the summer, but we are still about two months away from the new Chairman of the Bank of England taking over, who is of course Mr. Carney from the Bank of Canada. He is already stated that he is interested in expanding the monetary policy in London, so this should lead to even more weakness, especially once we find out exactly how aggressive he chooses to get. On top of that, the momentum simply seems gone from this market and this is a continuation of the longer-term downtrend.