December 17, 2008
GBP/USD Is The Latest Pair To Turn Bullish
Last week I mentioned that the EUR/USD had just turned positive on the daily chart (indicated by the Supertrend indicator turning bullish). I predicted that this pair would subsequently rise to around the 1.40 level before retracing back down again. My first prediction came true because it is currently trading at around 1.41, but we will have to wait and see if it retraces from here on in. It is currently hovering around the EMA (200) which I think will ultimately act as strong resistance.
Anyway the point of this post was actually to talk about the GBP/USD pair. After the close of yesterday's bar / candle, the GBP/USD has now followed suit and turned bullish on the daily chart (according to my trusty Supertrend indicator). This means that as a result I shall only be taking long positions on the 4 hour chart for these two pairs until the daily Supertrend turns red again, which is unlikely to happen for quite a while.
So where is the GBP/USD headed now?
Well I wouldn't be surprised to see it rise to between 1.60 and 1.65 in the short-term but longer term I still think the downtrend will resume at some point, and we will see further falls below 1.50.
The UK economy really is in dreadful shape at the moment and it's hard to be too positive about the GBP/USD pair at the moment, particularly with the likelihood of one or two more interest rate cuts in the coming months.