I don t think that we will be able to go higher than 1.66 because the aim of the counter trend was to absorb the panic sale. We still have a very sustainable economic growth in the USA.
The Fed meeting: 1) Very important.. this time we have already 2 members that voted against the Fed decision, and
in august we had only 1 ( they have better expectation for the economy and they think that FED
is to careful = the interest rate should be increased sooner.)
2) next month the will be stopped this shows that the economy is going well
Therefore my first target is 1.60 fallowed by 1.57 SL over 1.66
Price action is the summation of investor sentiment and crowd mentality, human nature is what it is, thats why TA works but the simplest explanation ( of price action ) is normally the correct one, any TA that you could not teach a 7 year old is probably not worth a dime unless you are trading pips on a min by min basis
I expect strength now ( as a retracement ( ii ) wave of three then weakness around the new year ( iii ) then a resumption of upward pressure. this will not change until the US does something to address the structural defecit and realize that the dollar years are near an end chiefly because it failed to adress the issue 5 years + ago, certainly interest rates aren't upward bound anytime soon. When the national debt gets to the 20TR level or there abouts we could see 4.xxxx GBPUSD as some creditor nations, firstly smaller oneslike Russia then Mid east and Chinese start to exert pressure and refuse to keep US LLC on life support.
In the Mid term I can't see 1.71xx being surpassed until Q1 2015 unless UK rates rise suprising early ( Which they may now that the Scottish itch has gone away )
I try to keep things simple. And try to enter position that are offering me a good risk reward.
I am trying not to see things 2 dimensionally, of course not all the time is the case. I entered short because i see that the markets are willing a stronger dollar , almost in every currency pair the dollar is getting stronger, i dont see why here should not be the case. I agree with you about the dollar, but this is something that would not happen now. If we will break 1.66 i will analyse again my position.
FRom a tradingpoint of view i'm thinking 1.57xx then a resumption of an upward momentum, probably coinciedent with a UK rate rise
Good luck and Cheers