GBP/USD Forecast May 5, 2017, Technical Analysis

The British pound rallied during the day on Thursday, as we prepared to go into the nonfarm payroll Friday. I believe that this market will continue to offer buying opportunities on pullbacks, as we have seen quite a bit of bullish pressure over the last several weeks. I think that the 1.2950 level above offers resistance, and if we can break above there the market will more than likely go testing the 1.30 level. I don’t have any interest in shorting this market, I believe it’s only a matter of time before the buyers break out and continue towards the top of the recent consolidation area at the 1.3450 handle.
Buying dips
As I stated before, I think the easiest way to make money in this market is to buy dips as they occur. Keep your leverage low, gives you an opportunity to ride the waves. Recently, we have been dipping lower but I don’t think that this is a change of trend, I think it’s just simply the market tried to consolidate and accumulate before we go much higher. After all, the move above the 1.2750 level was significant, and should continue to be thought of as the breaking point of the downtrend. I don’t think that the market has much in the way of bearish pressure, I think it’s more or less going to be simple exhaustion that we are starting to see. As we pull back, I’m looking for support of short-term candles to get long, and have been building to a larger position over the last several days. If we did break below the 1.2750 level, at that point I think that we would have serious problems with the potential uptrend going forward. However, right now I don’t see that happening although I do recognize today could be volatile.