The British pound rallies after initially falling on Thursday

The British pound has initially pulled back during the trading session on Thursday, reaching towards the 1.39 level. I believe that the 1.40 level being tested is a good sign, but the question now is whether we can break above that level. If we can clear the 1.4050 level, then I think that assures traders that we are trying to build a bit of a rally going forward, otherwise we could drop back down to the 1.39 level, if we break down below that level, then the market will probably go to the next handle, the 1.38 level.

I believe that we will see interest rates rising Great Britain like they are in America, but not quite yet. It could be that we are simply waiting for some type of momentum to build up before putting money to work. That would make a lot of sense, because we have rallied quite nicely of the last several months. After all, interest rates in the bond markets in America are starting to rise, and that of course is good for the currency itself. I believe that the bottom of the uptrend is somewhere near the 1.3650 level. I believe that the market should continue to be noisy, but I think that if you are patient enough to see whether we can break out or breakdown, you should get a nice move for at least one handle, perhaps even a couple of handles.