The GBP/USD pair initially fell during the trading session on Friday, reaching below the 1.35 handle again. Quite frankly, I liked seeing this, as a give us an opportunity to pick up a little bit of value. We were in an uptrend anyway, so when we pull back, unless it’s a complete change in trend, it’s a value proposition. I think that a break above the top of the range for the day should be a buying opportunity as well, and given enough time we could reach towards the 1.3650 level above. That is an area that is massively resistive, so if we can break above that level it’s likely that we will continue a longer-term “buy-and-hold” type of move.
I think in general, we will get that longer-term move, but there’ll obviously be a lot of noise in between now and then. I think that the 1.3333 level underneath is massively supportive, and if we can stay above there I don’t have any interest in shorting. That’s not to say that this is going to be the easiest trade to take, only that we will go higher over the longer term. Because of this, a small position might be the best way to play this market, as you can deal with the volatility in the market, and add as things go in your favor. Because of this, I am “long only” at least for the time being. Longer-term, I suspect that the longer-term downtrend in the British pound may be over soon.
Written by FX Empire