By: DailyForex.com
The GBP/USD pair bounced off of the 1.50 handle during the session on Thursday, confirming what I had anticipated over the last couple of sessions. This area of course offer significant support, and it should based upon the fact that it is one of the biggest large round psychological number that you could have on the chart. With that being the case, I feel that this bounce could continue, but I will be looking close to the 1.52 handle for signs of weakness that I can start selling again. Quite frankly, the 1.50 level will be supportive enough that you will need to back up and bring along more sellers in order to break it down.
.jpg "GBP/USD daily may 24")
The British pound should continue to suffer against the US dollar, after all it is the United States that are ready trying to throw money at right now. The British economy is so-so at best, and there is even concerns that the Federal Reserve will start to do things that could taper off the purchases that quantitative easing has brought us, and in essence bringing of interest rate slightly. That is yet another reason to consider buying the Dollar over the Pound.
Long-term downtrend
Let us not forget that this is a long-term downtrend that we are in. Yes, we did have a nice run from several months back, but we have broken a significant trend line to the downside, and you can see how the markets reacted ever since. The chart looks weak, and I believe that selling the rallies will be the way to go going forward.
I will be using short term charts to make my trading decisions near the 1.52 handle if we get up there, as I think an hourly shooting star or some other type of candle in the general vicinity will be enough for me to start shorting this market. After all, it is with the longer-term trend, and I have a nice exit going in case the trade goes against the: the 1.53 handle. If we get above that level, you would have to think that more bullishness come, but I have a hard time believing that even if we clear that area, but we can get above the 1.55 handle.