The British Pound has been showing signs of revival lately. Depending on where one is to look, they appear quite impressive. Against the US Dollar, the GBP has been in a steady uptrend, gaining close to 1500 pips since mid May. It just broke above the important resistance at 1.5525 and currently is at levels not seen since February. Not bad. While a lot of this is related to general USD decline recently, there were also some developments positive for the Pound.
Last week the second quarter GDP figures for UK were released. They indicated that the economy grew at the fastest rate in 4 years. The increase over 2009 was 1.1%, almost twice the forecast of 0.6%. We should remember, that initial figures in UK (like this one) tend to be a little too high, and get revised (most of the time – down) couple months later. Still, positive surprise. Today, the retail numbers were disclosed and these were also good. More retailers than expected reported increased sales in June. This lifted the Pound again.
The question is – will it continue? At this point the rally in GBP-USD is probably overdone and some correction is likely pretty soon. But one could expect more on behalf of the Dollar getting stronger, rather than the Pound getting weaker. However, other GBP crosses may still have room to move. Many of them are near intermediate term supports/resistances, breaking of which could clear the way for more Pound appreciation.
The EUR-GBP is very close to 0.8315 support. My last trade in this pair worked out good, perhaps this one will, too. Sell order is placed at 0.8305, looking for a 100 pips move. This is 4H chart, it could take a while, few days, a week?
Another one of the pound pairs on interest right now is the GBP-CAD. This chart has built a very strong resistance at around 1.6210. If it goes, a 250 pips move is very possible, with an even longer term target of 1.6800, or almost 600 pips. Since this pattern is relatively wide, I’m adding one more buy order at 1.5930, in case of a pullback. BTW, the order in USD-JPY, from last post, is valid for one more day, and then will probably be cancelled.
Mike K.
[...] Will the Pound rally continue? | fxmadness.com The EUR-GBP is very close to 0.8315 support. My last trade in this pair worked out good, perhaps this one will, too. Sell order is placed at 0.8305, looking for a 100 pips move. This is 4H chart, it could take a while, few days, a week? … View full post on EUR/GBP – Google Blog Search [...]
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To be honest my view is “who cares” how long it will rally for.
People that thought the tumble at the end of 2008 would have to finish soon just kept losing money for going long time after time again.
When it does reverse, and like a tanker, it will take a week to turnaround and will be pretty noticable to all of u. In the meantime just keep going long at the best opportunties
Jimmy
Will keep trying;)
[...] of those was a long in GBP-CHF, mentioned in Will the Pound rally continue? post. The set up was an upside breakout, above the resistance established at 1.6220, with my [...]
[...] of those was a long in GBP-CHF, mentioned in Will the Pound rally continue? post. The set up was an upside breakout, above the resistance established at 1.6220, with my [...]
[...] of those was a long in GBP-CHF, mentioned in Will the Pound rally continue? post. The set up was an upside breakout, above the resistance established at 1.6220, [...]
Insightful story. I will take a bit of time to think about your stuff!