The GBP/USD pair initially fell during the session on Monday, testing the 1.67 level for support. Ultimately, the market did show support there and as a result formed a hammer by the end of the day. That hammer of course shows that the market probably wants to go higher, and as a result we are more likely to see traders step into this market now that this hammer has formed in order to go higher. I think that buying is the only thing you can do at this point, and as a result it break of the top of the hammer will have me going long of the British pound.
On top of that, the market has been relatively supported in this general vicinity, and I ultimately believe that the absolute “floor” in this market is at the 1.65 level, and as a result I am not interested in selling at all, but simply buying whenever the market tells me it’s going to go higher. This hammer being formed for the session on Monday suggests this, and a move above the top of that hammer of course confirms it in my opinion. On the other hand, if we fall back to the 1.65 level, we would be more than willing to start buying supportive candles in that region as well.
British pound strength overall.
I’ve seen British pound strength overall in the markets anyways, so what I do is simply buy that currency. Forex trading is no more difficult than that, as you simply need to know what’s in favor. It appears that the British pound is in favor overall, and as a result I’m not interested in selling. It doesn’t necessarily mean that I’m always looking to buy it, but in a situation where a currency is going fairly well against most other currencies, selling it is dangerous at best.
Ultimately, I believe that the 1.75 level will be targeted, but we need to build up enough momentum to breakout to the upside. If we can do that, the market should be a nice buy-and-hold type situation for the rest of the year.
