GBP/USD Forecast May 11, 2017, Technical Analysis

The GBP/USD pair had a very volatile session on Wednesday, reaching the highs just below the 1.30 level again. We turned around to fall significantly, and test the 1.2925 region. This is a market that continues to be very volatile, but I think it is going to struggle to make any significant moves until we get the announcement coming out of London. There is an interest rate decision coming out of the Bank of England, but more importantly I feel that the meeting minutes will determine the next move in this pair. There have been a lot of inflationary concerns in the United Kingdom, and that has driven the value of the British pound higher. I believe that the meeting minutes will give us an idea as to where we go next, and signs of hawkishness will bring in the buyers.

Longer-term uptrend to continue?

The longer-term uptrend should continue in this market, and I believe that sooner rather than later the buyers will get involved. Because of this, I’m looking at supportive candles for opportunities to go long in a market that has been very bullish for some time. I currently believe that if we can break above the 1.30 handle, the market will then go looking for the 1.3450 level above there. That is the top of a significant consolidation area from the past, and should attract a lot of attention as traders tend to retest these areas repeatedly over the longer term. Currently, I don’t have any interest in selling this pair, but I do realize that if the meeting minutes aren’t what the market wants, it could sell off. If we do get a breakdown, I would reassess based upon daily charts going forward and will let you know my analysis at that point.
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