GBP/USD rose during the session to the 1.60 level as an official from the Bank of England suggested that further quantitative easing may not be necessary. This of course was positive for the Pound, and this pair reacted accordingly. However, the “risk off” trade came back later in the day as Ben Bernanke failed to mention anything about quantitative easing during the congressional question and answer phase during the session. The ECB is also silent when it comes to another round of the LTRO, so the markets bought the Dollar. If that is the case, this pair could continue lower. In fact, the shooting star that formed stopped right at the 1.60 level, and looks very bearish. A solid break lower than the bottom of the Wednesday range has us selling to reach the 1.5650 level. A break above the top of the shooting star would be massively bullish and have us long at that point.
Written by FX Empire