Now that the summer months are coming to an end and traders are coming back to the desks, it seems the foreplay of the recent consolidations is over and things are loosening up. First it was Silver to break the stalemate on Monday, Gold on Tuesday, and now the pound today, clearing a major hurdle and resistance that has held since mid-May.
The clearing of the resistance came via a strong breakout bar which closed near the top, suggesting little profit taking going into the close communicating more upside is likely. Although I wouldn't rule out a pullback towards the role reversal level, that hasn't seemed to be the theme as the prior breakout players (Gold/Silver) never looked back and all found higher prices. If this theme holds, the pound should be no exception.
Aggressive players can take longs around 1.5851 with stops below the 1.5750 area, targeting the big figure at 1.6000 and if continuation is in the air, 1.6054. More conservative players can wait for the pullback about 100pips back but the pound looks set for higher prices.
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Global Market Commentary:
Starting the day under water, US indices recovered most of their lost ground as the FOMC hinted central bank easing is likely coming to an index near you. Obviously, this boosted stocks along with Gold, Silver and pretty much everything vs. the USD. This will likely boost Asian and European indices into the next sessions along with precious metals.
Speaking of which, Gold gained about $13 closing at $1656 while Silver added about $.40 to close at $29.84.
Tomorrow should be quite volatile with key levels broken but plenty of key announcements coming due.
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