The British Pound is set to attempt another leg higher
As the new trading week kicks in we are looking at some opportunities provided by the British Pound which according to our prognosis can attempt another rally to the upside against the US dollar. We are buying daily calls for tomorrow at current levels.
Why are we doing that? Well the answer is simple - the pair has tested the most important region around 1.6450 today and we are looking forward to retest it after the pair managed to hold on above 1.6420 for the past couple of hours.
It is not a complicated trade since we have all the fundamental reasons to believe that the US economy will continue to expand in the first quarter of 2014. The best decision that we can make on current market data is to buy daily calls for tomorrow at current levels around 1.6429.
An alternative scenario will always be on our hands as we try to explore the possibilities offered by the GBP/USD binary options forex pair. On our chart you can clearly see that the pair has bounced off on Friday from 1.6395.
This is our safety level - we think that if during the next 24 hours the pair doesn't manage to stay afloat above the blue support line that we have on the charts, we could experience a drastic decline towards 1.6300 and below.
So to clarify, if we see an hourly close below 1.6395 we would take a reversal trade to cover our losses. Meanwhile the most important piece of data for the UK economy will be announced on Wednesday so there is plenty of time to figure out a nice trade for Tuesday.
If our scenario plays out, we will buy more daily calls on a break above the crucial levels at 1.6450-60. We view that to be unfolding an upward move towards 1.6490 and ultimately towards 1.6515. Stay tuned to our forecasts for more trading ideas! Have fun trading!