The cable took off to the upside originally during the session on Monday, but as you can see failed at the 1.68 level. The pullback formed a shooting star, and although this is a very bearish signal, I feel that the market really can’t be sold at this point as we have recently broken out. Besides, quite often markets will pull back to retest areas that were once resistance to see if they end up being support. I think that’s what markets try to do right now, so I am not interested in selling the British pound at the moment. Quite the opposite actually, I am waiting for some type of supportive candle below in order to get involved in this market.
I think that there’s plenty of support somewhere in the 1.66 area, and most certainly and the 1.65 area. With that, I think that pullbacks will offer nice buying opportunities, and the market should continue much higher after that. I believe that the market is simply taking a rest after seeing such a parabolic move over the last two weeks.
British pound strength continues.
The British pound strength overall continues, even though it had a little bit of a rough day on Monday. That being said, and simply a pullback from a significant move higher in the value the British pound against most currencies, and this pair of course will only show the same type of attitude. The difference about this pair is that the US dollar of course is relatively decent as well, so of course this pair might struggle a little bit in comparison to other pairs such as the GBP/AUD, GBP/CAD, and GBP/JPY.
That being said, I believe that this pullback is going to give us an opportunity to buy the British pound “on the cheap”, and I think that most of the market will be looking at the market this way as well. In fact, I don’t think you can sell this pair until it gets below the 1.63 level on a daily close, something that I don’t expect to see anytime soon.
