GBP/USD forecast for the week of July 7, 2014, Technical Analysis

GBP/USD forecast for the week of July 7, 2014, Technical Analysis

7 July 2014, 05:56
Sergey Golubev
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The GBP/USD pair broke out during the course of the week, breaking above the top of the hammer from the previous week it was sitting on top of the 1.70 level. Because of this, we really like this market for long positions at this point in time, and believe that ultimately we should continue to go much higher. In fact, we believe that this market goes to the 1.75 level given enough time, and that pullbacks going forward should continue to offer “value” as the British pound continues to strengthen based upon the fact that the British economy seems to be coming out of recession. This has the British pound looking strong against both currencies anyway, but this is the bellwether if you will, of Howell the British pounds going to do overall. So it really doesn’t matter which British pound-based pair you are trading, you need to pay attention to this particular market.


On the other side of the Atlantic, the Federal Reserve is starting to see signs of the US economy waking up, and that of course is good for “riskier” assets. The British pound is often thought of as such, although we see that as a bit of a farce. Nonetheless, we know that correlation is that good economic news in general tends to push this pair higher, so why fight it?

We believe that this market will probably go higher than the 1.75 level given enough time, because quite frankly the 1.70 area is more significant on the longer-term chart. However, we recognize that area does in fact have some significance, so more than likely we have just entered a “buy and hold” type of move but recognize that there will be challenges above. Markets do not move in one direction forever, but this is in fact one that should continue to be very positive for a very long time in our opinion. If you are not trading this particular pair, again, pay attention to this market simply to see whether or not you can buy the British pound against other currencies.




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