After approaching resistance at 1.68 the pound lost some ground last week but it should be considered as a healthy pull back rather than a reversal. I still think the market priced in well in advance a future rate hike from the BOE and the pound is fairly priced. However, we can’t fight the market but go with it. I think next week the market will be looking for triggers to buy the pound.
Considering that we are still in a bull trend, shorting the pound just above resistance would mean self-inflicting some pain. My suggestion is to wait for a trigger, I think upside is more likely but I would wait until we breach the 1.68 level before entering any longs, for pound bulls I would recommend to trade other pairs such as the EUR/GBP or GBP/JPY.
