The British pound has rallied significantly during the trading session on Monday, breaking above the 1.43 level. That level has been significant resistance in the past, so the fact that we have broken above there suggests that we are going to go to the 1.45 handle. That’s an area that has been important in the past, and I think that we will eventually try to break above there as it is a psychologically important level, but it also is an area that I think can only hold for so long. In the meantime, I like buying short-term pullbacks, as the 1.43 level should offer support now.
The British pound has been very strong for some time, and I think that should continue to be the case, as it is one of the better performing currencies in the Forex world. I believe that we will probably need to make several attempts to break above the 1.45 handle, as these levels tend to be very difficult to overcome. However, I think that the market should continue to be positive enough that we will eventually break out to the upside. If we break down below the 1.42 handle, then I think the market would roll over to the 1.40 level where I expect to see the “floor” of the overall uptrend that we have been in for some time. The market participants seem to favor the upside every time the stock markets rally, and even when they fall, this market tends to fall less than other currency pairs.
Written by FX Empire