The GBP/USD pair fell on Friday as the jobs number came out weaker than anticipated. The 1.55 level was violated, but not significantly so and as such we think that further weakness will need to be seen in order to feel confident in shorting this pair. Recently, we have been in consolidation between 1.55 and 1.5750, and is such a bounce from here isn’t necessarily surprising if it happens, but rather we think that it could be another selling opportunity.
Our thesis isn’t the British pound should be sold necessarily; rather the US dollar should be bought. As such, we feel that selling the Euro will probably get more mileage than selling the Pound. This will be especially true against the US dollar, but may show itself in various currencies as well. As for buying, we simply will not do it until we close well above the 1.58 level.
Written by FX Empire