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The GBP/USD pair surge during the Friday session as the "risk on" trade came back into play. The US dollar was beat up pretty much around the world, and as such certain pairs really accelerated to the upside for the session. The 1.55 level that was broken on Thursday has been reclaimed again, and this looks as though we are trying to bounce back to the recent highs at the 1.57 area. In other words, this looks very consolidative, and this would make sense as we are in the middle of the summer trading season.
We feel that the next move is probably higher, but in till we get above the 1.58 level we would be relatively cautious about getting too long. Obviously, a break below the Friday as low would be an extremely bearish signal, and sending us down to the 1.5250 level.