The British pound has rallied significantly during the week, breaking above the 153 level, and even the 153.50 level as I record this. I think that the market is going to go to the 155 level above, which is a psychologically important level, and has been structural resistance recently. It now looks as if we are going to continue the up-trending channel, so I do believe that we break above the 155 level eventually. That’s not to say that there will be some type of reaction there, obviously we could, but I think that the overall attitude of the market is obvious at this point.
Looking at this chart, I think that the 150 level should offer a bit of a “floor” now, and if we can break above the uptrend line that I have on the chart, we could go even further, perhaps extending to the 160 level. I believe that the downtrend in this pair is over, but it is going to be very noisy between here and 165, as there is a lot of clustering from a couple of years ago. Ultimately though, I think we are going to continue to be a “buy the dips” market unless something changes fundamentally as far as global risk appetite is concerned.