The GBPUSD pair initially fell during the course of the day on Wednesday, but found enough support below at the 1.56 level to turn things back around and form a nice-looking hammer.

This hammer of course suggests that the market is going higher, especially considering that it comes on the heels of a very strong bullish candle.

Ultimately, we believe that the market should then head to the 1.58 level, and as a result we are buyers on a break above the top of the hammer, and also on pullbacks that show signs of support on short-term charts.

Editor’s Note: Equity investors/traders can use the Currency Shares British Pound Sterling Trust (FXB, quote) ETF to take positions in the yen without a FOREX account.  The ETF looks to track the price of the British Pound Sterling (GBPUSD), minus ETF fee. The fund seeks to reflect the price of the British Pound Sterling (GBPUSD) with the shares representing a cost-effective investment relative to investing in the FOREX market.

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