GBPUSD pair initially rallied a bit, but at the end of the day could not break above the 1.30 level with any gusto.

At this point in time, it looks as if the market is going to probably struggle to keep any gains, so I look at any exhaustive candle is a selling opportunity as the British pound continues to get pummeled. I have no interest in buying, and believe that the higher we go, the more likely we are to sell off and look at exhaustive candles as opportunities again and again.

After all, the United Kingdom voting to leave the European Union is going to continue to weigh upon the British pound as people as traders do not like the idea of uncertainty. On top of that, the United States is considered to be a bit of a safe haven at the moment, as at the very least the economy seems stable.

With nonfarm payrolls result that the United States added over 275,000 jobs last month as the announcer came out today, and that of course should favor riskier assets. Typically, that would make this pair go higher but at the end of the day I think it makes much more sense that this pair breaks down because of the concerns in the UK more than anything else. A break down below the hammer from a couple of days ago would be a signal that we are getting ready to reach down towards the 1.25 level.

I think rallies will be sold on short-term charts, as there is a lot of noise between the 1.32 level above and the 1.35 level above there. A resistive candle should be the best sign, unless of course we break down which of course shows a buildup of downward momentum. The gap just above the 1.35 level should continue to be the absolute “ceiling” in this market as this should continue to be an area where sellers jump on the British pound. Regardless, there’s no way that I can testify buying this pair at this point.

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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