GBP/USD rallies on Friday at support

The British pound rallied a bit during the trading session on Friday, using the 1.40 level as support. We also have seen buyers come in at the 50-day EMA, as it has been dynamically supportive for the past week or so. I believe that the market should continue to find buyers, and a move above the 1.41 level should send this market to the 1.4250 level. I think that given enough time, we can break above the 1.45 handle, that should send the market towards the 1.45 level. I like buying short-term pullbacks and recognize that the 50-day EMA continues to be an excellent barometer of buying pressure. If we did breakdown below there, the market could go to the 1.38 level next.

The market continues to find buyers underneath from what I can tell, so I have no interest in shorting it, least not anytime soon. The 1.3650 level should continue to be massive support, and therefore if we broke down below there, it could be a bit of a trend change, but I don’t see that happening anytime soon. If we can break above the 1.43 level, that would be reason enough to add to an already long position.

The Bank of England is expected to raise interest rates later this year, so I think that the British pound will continue to do fairly well, and if we can get signs of bullish pressure in the stock markets, that should continue to push this pair higher as well as it tends to be a bit wrist sensitive.