By FXEmpire.com
The GBP/USD pair fell for the week overall, but had a strong bounce on the Friday as the Non-Farm Payroll numbers came out with 80,000 less jobs created than expected. The report had a run from the Dollar, but in the long run we think that this could perhaps turn around as the world will more than likely look to US Treasuries for safety, which will in turn ironically push the value of the Dollar up.
Also, we have to look at the overall action during the last week – it was very bearish indeed. The 1.60 barrier has been tough, and so far we have only seen one serious attempt to overcome it, and this was violently rejected. The 1.58 level also has held up quite nicely as support, so there is a real chance that these two levels could be our trigger levels.
The breaking of the 1.60 level on a daily close would be a strong sign by this pair, but the recent highs should also be overcome as well in order to feel secure in our longs. The breaking below the 1.58 level would be a massive sell signal as well, on a daily close of course.
The British Pound is sensitive to risk appetite, so we could see a bit of volatility going forward as the world tries to figure out what to make of weaker employment numbers in America, and the various issues in the European Union. If there is a global slowdown coming, the EU will be in real trouble as the debt crisis will add to already recessionary woes in that region. With the United Kingdom sending over 40% of its exports into the Euro region, there is a real knock-on effect by this struggle. Either way, it is likely the Pound will eventually sell off because of this.
The keys for us are a daily close above the recent highs (post 1.60) in order to buy this pair. The breaking down below of the 1.58 level on the daily close has us selling this pair. Until then, we monitor only.
GBP/USD Forecast for the Week of April 9, 2012, Technical Analysis
Originally posted here
