The GBP/USD pair initially fell hard during the session on Friday, but as you can see based upon the daily candle, the market got quite a boost later and shot straight higher. The resulting candle is a hammer, and it is sitting underneath the 1.65 level. This of course gives us somewhat conflicting signals, but if you try to “read the mind” of the marketplace, you can see that it appears there are plenty of buyers out there trying to push his pair higher.
If we can get a daily close above the 1.65 handle, I believe that this market will eventually head to the 1.70 level, an area that I have targeted for some time. That being the case, I still only buying this pair, and will not sell it simply because of the renewed strength of the buyers late in the day on Friday.
Nonfarm payroll numbers
The strength of the British pound has been seen around the currency markets anyway. However, part of the strength of the British pound against the US dollar will be based upon the fact that the jobs numbers out of America haven’t exactly been stellar of the last 30 days. Nonetheless, this pair looks like it’s ready continue going higher for one reason or another, be it British strength or American weakness, but at the end of the day I believe that one cannot work against the strength of the buyers in this market.
Don’t be wrong, I believe that there will be plenty of choppiness all the way to the 1.70 level, binds looking at the way the British pound has performed against the Swiss franc, Japanese yen, and many other currencies, I still believe that buying is the only way to go. I would also point out that this pair could be used as a bit of a “relative strength to gauge”, meaning that if you are not comfortable with the volatility in this pair, you could use it as a signal to buying the British pound against some of those other weaker currencies.
