The GBP/USD pair tried to rally during the session on Thursday, but as you can see the 1.5650 level offered enough resistance to push the market back down, and form a shooting star. However, the shooting star is in the center of the recent consolidation area that the market has been bouncing around in. The 1.55 level is the support area that the consolidation area has been respecting, while the 1.5750 level has been massive resistance. With the fact that we formed a shooting star, I would normally be very bearish of this market, but in the end I believe this has a lot to do with the markets flattening out their position instead of holding onto their trades with the upcoming nonfarm payroll number later today possibly rocking this market.
The fact that we are essentially in the middle of this area keeps me out of this market at the moment, as it is essentially "no man's land." Because of that, I believe that it will be interesting to see how the market behaves once the announcement comes out, and we hit one of these support or resistance areas. With the US dollar being the focus of the Forex markets recently, and whether or not the Fed is going to taper off, more than likely this pair will move fairly drastically.
Waiting until the end of the session
I believe that waiting until the end of the session is probably the best way to go with this market. I need to see how the market reacts to the announcement of the jobs number in order to ascertain what the traders out there believe. I also need to see whether or not we are near a support or resistance area in order to see some type of reaction to that as well. Because of this, I think this market might be choppy going forward, but there is a strong chance that the true longer-term move won't happen until we get the actual announcement directly out of the Fed on what they want to do as far as tapering is concerned next week.
