GBP/USD forecast for the week of October 29, 2012, Technical Analysis

The GBP/USD pair initially fell below the 1.60 level during the past week, but bounced strong in order to finish just under the 1.61 handle. This market is starting to show signs of strength again, and was one of our favorite buy-and-hold markets just recently. It looks like we are about to enter another one of those phases, as the Bank of England continues to be perfectly fine with its monetary policy while the Federal Reserve continues to want to ease even more. Because of this, we believe that the British pound will continue to be favored over the US dollar with the exception of days that you find a real “risk off” attitude. On a break of the highs from this previous week, we will be buying this pair.