By: DailyForex.com
The GBP/USD pair fell hard during the session on Tuesday as the British pound continues to pick up bashing. The US dollar of course is the favored currency around the world, so if you want to short the British pound, this is the pair to do it in. The 1.50 level is just below, and should provide some type of support. However, I believe that that level will eventually give way, and we will see continued softness in this market.
The British economy of course isn't doing so hot, it while the United States enjoys growth - something that much of the world is either lacking, or simply not getting at the moment. Because of this, I believe that the US dollar will be the currency to own throughout the summer, and this pair could in fact drop quite a bit.
Most traders expect that the Bank of England will continue its quantitative easing going forward, and as a result the British pound will more than likely find itself on the back foot going forward. Also, you will notice that the pair seems to selloff every time there's an attempt at a rally. This is counterintuitive, as typically this pair will rally with stock markets going forward, but as stock market rally, this pair has simply look formal. If it cannot find its footing in a "risk on" type of environment, when will it?
Dovish new Gov. coming
The new age of England Gov. Mr. Carney, is expected to continue with the monetary policy of easing, and has even stated so much as his intention and need in his opinion to continue to weaken monetary policy. If that's the case, the market will of course try to jump out in front of that, and as a result this pair should continue to fall. The real question isn't whether or not it's going to continue lower, rather how long it will take to break down below the significant 1.50 level. Every time it rallies, I will be selling. On a daily close below that level, I am aggressively short of this market.
