The GBP/USD pair shot higher during the course of the day on Thursday, as we continue to bounce from the 1.52 level. This is an area that we are approaching now that is significant resistance in the form of the 1.55 level, so having said that the market will more than likely try to pull back from here. I recognize that the move has been rather strong, but at the end of the day we are just below the 1.55 level that offered so much support, and of course an uptrend line the kept this market afloat during the entire summer. With that being the case, I believe it’s only a matter time before the sellers get back involved. In fact, I am counting on it. I am more than willing to sell a resistive candle in order to take advantage of what has been a pretty significant breakdown of support recently.
Daily closes
I believe that looking at daily closes will be the way to go going forward, and I recognize that I could be wrong, and that we could go higher. However, we need to break above the 1.55 level, the uptrend line, and then close above both of them at the end of the day in order for me to start buying. If we do that, I am more than willing to start going long and aiming for the 1.58 handle. However, experience has told me that when we get a significant breakdown like this, it’s quite often that we come back and test the support for resistance. That resistance should end up being a nice selling opportunity, but at this point in time with all of volatility in the markets I think it’s best to simply wait for confirmation on the higher time frames.
All things being equal, I do prefer to sell this market but I also recognize that things can change if the Federal Reserve ends up disappointing the markets as far as an interest rate rise is concerned. With that, anything is possible over the next couple of weeks.
