March 19, 2009
GBP/USD Races Back Up To 1.45+
The GBP/USD (and indeed the EUR/USD pair) has surged upwards in recent days and is currently trading above the 1.45 level. This is of course largely as a result of the Federal Reserve following Britain's lead and using quantitative easing measures of their own to try and bolster the US economy.
This news has therefore weakened the dollar in the short-term and as a result the GBP/USD has risen sharply. This makes a mockery of my previous prediction that 1.30 was a possible short-term target, but nevertheless on a technical basis I still think we could still a fall in the coming weeks, particularly if it stays below the current daily Supertrend level of 1.4592.
Even if it does close above this level we still have the psychological 1.50 level to contend with, so although we have seen some strength in the GBP/USD pair in the last few days, I am still favouring the down side. At the moment I would be very confident that 1.40 will be hit before 1.50 but we will have to wait and see.