GBP/USD rally slightly on Monday

The British pound rallied a bit during the trading session on Monday but failed to pick up any significant momentum. It looks as if we may try to roll over and test the 1.40 level for support, but I think the area will hold between now and the jobs number. If we don’t, then I think we go towards the 1.39 handle, and then perhaps the 1.3750 level. There is a major uptrend line underneath there, and I think that will be the reason we keep afloat. There’s a lot of potential noise here, so keep that in mind and keep your position size small.

The 1.43 level above is a target, but it could give way to enough pressure and send this market towards the 1.45 level. That’s a major barrier, but I think it’s only a matter of time before we need to either break above the 1.45 handle, or perhaps break down below that uptrend line. At that point, the market would then pick up a bit of momentum, something that’s desperately needed to trade this pair as it stands.

I think that the markets will be very difficult to deal with this week, as there are so many headlines coming out, not only on Friday, but several other things. I believe that the British pound has a lot of work to do before can break out to the upside, but we certainly are in an area that is going to be very important when we look back.