The GBP/USD pair fell for much of the Monday session, but bounced in order to form a bit of a hammer that is focused on the 1.60 handle. This makes sense, as the level is a large round number, and the pair is so bullish lately.
We see absolutely nothing on this chart that would suggest selling is a viable strategy, and in fact would be buying a break above the Monday highs as it is a classic breakout and pullback type of move. The Bank of England is said to hold still as far as interest rates are concerned, and many people around the world expect the Federal Reserve to extend its quantitative easing until 2015, or even later. With this being said, this should continue to push his pair higher for the long term.
Written by FX Empire