GBP/USD Technical Analysis October 13, 2011

The GBP/USD rose rapidly during the Wednesday session, as the global risk attitude of traders increased. Also, there certainly would have been some short-covering by traders as the pair bounced. The pair has broken above the significant 1.57 area, but as we look at the daily charts we see that the gap from a few weeks ago got filled during Wednesday. This is often a massive barrier, and we can’t help but notice that it pushed back against cable. The pair looks like it could pullback, and this would be with the longer term trend. If we find ourselves dipping back below the 1.57 level for anything over an hour, we would be willing to sell this pair as it would be likely to continue the down move.