By FXEmpire.com
The GBP/USD pair initially fell hard during the previous week, as the trading community started to avoid anything remotely risk related. The ECB managed to disappoint during its meeting, and the Federal Reserve really made no real statements about easing which of course got many of the momentum traders out of the market.
However, we did get a stronger than expected jobs report out United States on Friday and this put the “risk on trade” back into play. The addition of 165,000 jobs was better than expected, and as such people started looking for yield. Adding to the confusion however, is the fact that the unemployment rate is now 8.3% which of course is a gain of 1/10 of a percent. It appears now that the market is betting on the Federal Reserve stepping in and easing in September, and we feel that the dollar could suffer against certain currencies are the result. The British pound is certainly one of them it appears
On a breakout above the 1.58 level we think we race all the way to 1.63 before it’s all said and done. The fact that we placed a second hammer in a row on the weekly chart just underneath this resistance level of 1.57-1.58 leads us to believe that it’s only a matter time before this pair breaks out to the upside.
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Originally posted here
