The GBP/USD pair initially fell during the Tuesday session, but as you can see bounced high enough to form a supportive candle. The supportive candle of course slammed into the 1.62 handle, which course is a large round psychologically significant number. Nonetheless, I do recognize the fact that this pair has a certain amount of resistance all the way to the 1.63 handle, and it is a daily close above that level that I'm looking for in order to start buying.
If we do pullback in this general vicinity, I believe that it will simply be a buying opportunity. Ultimately, I fully expect see this market climb higher and break above the all-important 1.63 level. On the daily close, I am willing to hang onto the trade to the upside for at least a move to the 1.65 handle, and quite frankly I think we could even had as high as 1.70 given half a chance.
Employment numbers in the United States.
This market will be determined by a lot of different factors, but do not forget about the employment numbers in the US. After all, the Federal Reserve has to decide whether or not it's ready to taper off of quantitative easing, and we all know that employment is one of the biggest concerns they have. If the employment numbers continue to improve, people will begin to think that the Federal Reserve will taper off relatively soon, and that will be very positive for the Dollar.
On the other hand, if the employment number does not pick up, expect the US dollar to sell off against most currencies, and the British pound of course will be one of them. After all, the British pound has strengthened against almost all currencies, and the fact is that it is one of the favored currencies around the world at the moment. Because of this, it would not surprise me at all to see this market go higher, and at this point time I am not willing to sell. I will simply be looking for buying opportunities, either above the 1.63 handle if we get it, or pullbacks.
