The GBP/USD pair fell during the session on Monday, but as you can see found enough support at the 1.71 level to turn things back around and form a little bit of a hammer. This area has been supportive over the last couple of sessions, and we are most certainly and an uptrend to begin with. With that being the case, I am essentially a “buy only” trader when it comes to the cable pair, as I believe breaking above the 1.7050 level was a significant break out in this pair, telling us that the market should eventually go to when I believe that the next massive resistance area, the 1.75 handle. This level of course is a large, round, psychologically significant number, and more importantly a bit higher than we currently are right now. With that being the case, I believe that the market will be one that you can buy on dips, but ultimately should continue to be positive.
Don’t fight the trend, and this could turn into a buy-and-hold situation.
Don’t fight the trend, ever. I believe that the trend since the end of March has been rather strong, even though we did have a bit sideways during part of it. Ultimately though, we build up enough pressure to break out above the significant resistance, and I believe that the longer-term chart certainly look very positive. Breaking out to the upside sends this market heading to the 1.75 handle as I mentioned previously, and I think we go above there as the 1.7050 level was without a doubt in my opinion much more resistive than the 1.75 handle, which ultimately should be broken to the upside.
If we break above the 1.75 level, I believe that this becomes a buy-and-hold situation and we probably will find this market to be one that goes much higher, offering a longer-term trade with a slight positive swap at the end of the day. On the other and, if we broke down below the 1.68 level, I think the market then falls apart. However, I find that scenario almost impossible to imagine.