GBP/USD Weekly Price Forecast – British Pound Testing Major Support

The British pound has fallen a bit during the course of the week, reaching towards the 1.37 handle. The 1.37 handle has been important more than once, so it makes a certain amount of sense that we have to test it again. If we break down below that level, then the 1.35 handle will more than likely be the next target. Quite frankly, the British pound certainly looks as if the market could turn against it. It is worth noting that the 1.42 level is a massive resistance barrier on the longer-term charts, so we most certainly should pay close attention to that.

GBP/USD Video 05.07.21

Do not get me wrong, there is a very significant amount of support underneath, so I do think that we need to pay close attention to any potential reversal. Nonetheless, the market certainly looks threatened, so I am not about to get bullish unless we see a massive turnaround just below where we are now.

At this point, it is probably a bit difficult to put big positions on, but at the end of the day the British pound will more than likely move right along with other currencies in reference to the greenback. The US dollar of course has seen a bit of a turnaround, and the US Dollar Index certainly looks as if it is trying to break above a significant downtrend line. If it does, that will almost certainly translate into lower pricing over here.

I anticipate that the next several weeks are going to be very volatile in the British pound, so from a longer-term standpoint it is probably almost impossible to put a lot of money to work. For what it is worth, I will probably be trading this market from the four hour chart.

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