GBP/USD Forecast August 28, 2013, Technical Analysis

The GBP/USD pair fell during the session on Tuesday, slicing through the 1.55 handle at one point during the day. However, as you can see we bounced enough from that area in order to form a hammer, and quite frankly we feel that a hammer at the 1.55 area is a nice buying opportunity as we have seen so much bullishness in this pair. The fact that the support did end up holding at the end of the day also tells us that there are people wanting this pair to go higher, and as a result they are taking their opportunities as they come.

We don’t necessarily believe that this market is going to skyrocket to the upside, rather that we will continue to bounce around between the 1.55 and 1.5750 levels. If that’s the case, then we think that there is a nice short term set up forming right now, on a break of the highs from the session on Tuesday.

However, we could always break down below the bottom of the hammer, which of course is a very negative sign. In that particular scenario, we would be more than willing to sell and aim for the 1.5250 level as it is the next significant support area. Granted, the 1.54 level also offers a bit of support, but in the end it is only minor. That being the case, we think that more than likely we should see a significant move if we fall from here.

However, the trend most recently has certainly been to the upside, so we are most certainly more comfortable buying then selling. A lot of this would’ve been predicated upon tensions in serious, and a rush to the US dollar. However, that is probably a bit of a knee-jerk reaction, and as a result we think that this market will get a little bit of a bounce from here. Also, we think that the 1.5750 level will be very resistant, so because of this we are not ready to hang onto the trade for any real length of time at this point.


GBP/USD Forecast August 28, 2013, Technical Analysis

Written by FX Empire