The GBP/USD pair fell during the bulk of the session on Thursday, and even tested the 1.63 level. This level is supportive though, and it doesn't surprise me at all that we got a little bit of a bounce from there. Ultimately though, I believe that we could pullback as low as 1.62 on a knee-jerk reaction to the nonfarm payroll numbers coming out later today. That would be in reaction to a stronger than anticipated number coming out of the United States, but ultimately I still believe in the strength of the British pound overall.
The British pound has been strong against almost every currency that I follow, and the US dollar of course is going to be no different. However, the one caveat with this particular pair is the fact that the US dollar is being followed by so many different traders right now as questions of tapering continue to linger in the markets.
Longer-term uptrend, could be interrupted.
This pair has a longer-term uptrend that it's been following for some time now. Granted, we went sideways for several months there but at the end of the day we have found this market to be positive overall. I don't think this is going to change anytime soon, and I still anticipate this market aiming for the 1.65 handle in the relatively near future. In fact, a pullback to the 1.62 level I believe gets buyers in to the market hand over fist, looking to take advantage of perceived value. After all, this was the site of the most recent breakout, and a simple pullback to that level would simply be the market looking for previous resistance as new support.
That being said, I still believe that you cannot sell this market. It simply easier to sit back and let the market come down to lower levels in order to start buying. On the other hand, if we break the top of the two shooting stars from earlier in the week, that would be a massively bullish sign. Either way, I will be long of this pair again soon.
