The GBP/USD pair initially fell during the session on Thursday, but as you can see the 1.71 level has offered enough support to turn the market back around and form a nice-looking hammer. I am long of this market anyway, but this hammer makes me even more confident of the uptrend that we are starting to see yet again in this market. Any pullback from here should continue to attract buyers, and right now I believe that the 1.70 level should continue to be the “floor” in this market. I find it almost impossible to believe that we are get a break down below that level anytime soon, so I am massively bullish of the British pound in general.
The Federal Reserve got a better than anticipated jobs number during the session on Thursday, so it’s very likely that they will continue to look to tighten monetary policy, while at the same time the British economy is coming out of recession by all signs. With that, we believe that the market will continue to favor the British pound over the US dollar as the slightly positive news out of America is relatively calm when it comes to comparing the growing strength of the British economy to the American one.
No need to fight the trend.
The trend has been very strong recently, and I don’t see any reason whatsoever to think that it’s going to change anytime soon. After all, you can see that the move all the way from the 1.67 level has been rather strong, with the exception of the 1.70 area where there was a bit of clustering. That area should now get to be massive support, so really at this point in time I see no reason why this market won’t head to the next major large round number, the 1.75 handle. With that being the case, I am buying every time this market dips, and have absolutely no interest whatsoever in selling as I think it is a great way to lose money if you attempt it.