By: DailyForex.com

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.

GBPUSD 7814

Related Articles
  1. Mutual Funds & ETFs

    The 4 Best T. Rowe Price Funds for Growth Investors in 2016 (TROW)

    Discover the four best mutual funds administered and managed by T. Rowe Price that specialize in investing in stocks of growth companies.
  2. Mutual Funds & ETFs

    The 3 Best T. Rowe Price Funds for Value Investors in 2016

    Read analyses of the top three T. Rowe Price value funds open to new investors, and learn about their investment objectives and historical performances.
  3. Tax Strategy

    Profit from Art with a Charitable Remainder Trust

    With a CRUT, art collectors can avoid capital gains taxes on the sale of art– while also leaving their favorite charity a legacy.
  4. Active Trading Fundamentals

    4 Stocks With Bullish Head and Shoulders Patterns for 2016 (PG, ETR)

    Discover analyses of the top four stocks with bullish head and shoulders patterns forming in 2016, and learn the prices at which they should be considered.
  5. Economics

    How Negative Interest Rates Work

    Policymakers in Europe go for the unconventional: negative interest. What could happen?
  6. Budgeting

    The Honest Company Bundles Review: Are They Worth It?

    Learn more about The Honest Company and its bundle subscription services, which deliver discounted diapers, formula and other baby products to your doorstep.
  7. Fundamental Analysis

    Will Airlines Keep Flying High in 2016?

    Learn why the airline industry has such a unique set of variable and fixed costs that makes it very difficult to forecast its performance each year.
  8. Investing News

    These Free Super Bowl Ads Happened (BUD)

    The average 30-second Super Bowl cost marketers $5 million in 2016. But these companies benefited from free advertising during and after the game.
  9. Mutual Funds & ETFs

    Top 3 Lazard Funds for Retirement Diversification in 2016

    Learn about Lazard Asset Management, its long history of strong performance and the top three Lazard funds to consider for retirement diversification.
  10. Investing

    Harry Potter and the Unnecessary 8th Book

    A "special rehearsal edition" of the recent Harry Potter play--to be released July 31 as the eighth book in the series--will boost the franchise's fortunes, which have been sagging lately.
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  3. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  4. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  5. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  6. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center