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The GBP/USD pair rose during the session on Thursday after printing a nice-looking hammer on Wednesday. We have suggested that the 1.62 level was going to be rather supportive, and as such this move really didn't surprises. However, we are still in the middle of pretty serious consolidation and therefore aren't overly excited by the current form. We need to see a break above the 1.63 level in order to start adding to are already long position in this market.
If we see a pullback, we think the 1.60 level will be as far as it can go as it should be massively supportive. The Federal Reserve continues to print currency, and as such it should continue to weaken the US dollar. Conversely, the bracing very happy with their monetary policy, and as such the interest-rate differential between the two countries should continue to expand in the bond markets, which of course will push money into the United Kingdom.