The GBP/USD pair went higher during the session on Friday, stretching towards the 1.6250 level. This area is significant resistance, but at the end of the day. I need to see this pair break above the 1.63 handle on a daily close in order to buy-and-hold, as the market would go much higher. At that point, probably chasing the 1.65 level before it's all said and done. With that being the case, I feel this market could pullback in this general vicinity, but that simply will be a momentum building exercise as we try and breakout above what has been pretty stubborn resistance.
The British pound itself looks rather strong, and has done quite well against many of the other currencies around the world, so of course the US dollar will be too different. However, recognize the fact that the US dollar has been doing better than some other currencies out there, so therefore this breakout may take a little bit longer than anticipated. A pullback here could be a buying opportunity, but sooner or later the market has to make some type of longer-term decision.
British pound strength continues.
Judging by the look of the British pound against many of the other currencies around the world, I expect to see the British pound continue to strengthen against pretty much everything. Because of this, I think this market will breakout relatively soon, but you have to be rather patient when betting against the US dollar at the moment. After all, the world waits to see what the Federal Reserve is about to do, but we do know that a lot of traders are starting to bet on tapering, which of course will help the US dollar overall. With that, the dollar should continue to appreciate against most currencies, so it may have a little bit of a dampening effect on the march north in this market. It's not that I don't think that the market won't go higher, it just may move a bit slower than some of the other British pound related markets, such as the breakout that we are seeing with the Australian dollar at the moment.
