- The GBP/USD pair does in fact look very bullish.
- We have had a massive move to the upside and ended up testing the 1.32 level, although we are starting to see a little bit of hesitation in that region.
- At this point in time, the market has a lot to think about this week, as we have both central banks giving us interest rate decisions and press conferences.
All things being equal, the GBP/USD market remains bullish as we have seemingly form some type of bullish flag. We haven’t necessarily broken out to the upside at this point, and therefore it’s likely that we could continue to see a lot of noise between now and Thursday, when the Bank of England comes up with its interest rate decision and its press conference. It’s also worth noting that the Federal Reserve has its interest rate decision on Wednesday, so I suspect that Tuesday might be somewhat quiet, but Wednesday and Thursday will certainly be massive and its implications as to where we go next. As things stand right now, it certainly looks like the market favors the upside, but that doesn’t necessarily mean that it continues to.
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Volatility Ahead
I still believe that there is a lot of volatility at, but if we can make a fresh, new high, meaning that we break above the 1.3275 level on a daily close, I am more than willing to get long of this market. The so-called “measured move” would suggest that we could go as high as 1.3775 or so. If we turn around and fall from here, we need to pay close attention to the 1.30 level, as it is a major large, round, psychologically significant figure, and of course we also have to pay close attention to the 50 Day EMA indicator, as it does tend to attract a lot of interest.
All things being equal, this is a market that continues to see a lot of volatility and the questions asked of both central banks, and of course we also have to keep in mind that this is a market that continues to be one that will be more or less influenced by the US dollar and the way it behaves against almost everything.
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