The British pound went sideways during the session on Wednesday, but then exploded to the upside as Mark Carney suggested that the Bank of England would have to raise rates if the global economy starts to heat up. This is not a revelation as far as I can see, but quite frankly the market looks as if it was a bit surprised by that statement. Because of this, we sliced through the 1.29 handle, and it now looks as if we may continue to go higher. The top of the consolidation area that we have just entered is the 1.30 level, and that of course is the target now. I think that short-term pullback should continue to be buying opportunities, as the explosive moved to the upside should have some follow-through based upon the impulsivity of it.
Unlike most traders, have a longer-term bullish bias as the market has shown how quickly it is ready to turn around. The line of what we have seen might be a bit of a short covering rally, but quite frankly it doesn’t matter to me why the market rallies, just that it does. If we can break above the 1.30 level, the market should then go to the 1.3450 level. Ultimately, the market should find the 1.28 level to be massively supportive, and essentially a “floor” in the most recent moved to the upside. If we can stay above there, I believe that this is essentially a “buy only” market. It might be volatile, but I’m willing to add to my position every time we find signs of support on pullbacks, as it could lead to a larger position for the longer-term moved to the upside. Pay attention, this is where careers are made.
Written by FX Empire