GBP/USD Price Forecast – British Pound Bounces From an Initial Selloff

The British pound has initially plunged during the trading session on Monday as there was a major “risk off move” almost immediately. That being said, the market is likely to continue to see a lot of noisy behavior, as we are heading towards the very end of the year. At this point time, the market is likely to continue seeing a lot of confusion and perhaps even position squaring heading towards New Year’s Day. Because of this, we could see sudden moves, but at this point in time the 1.32 level underneath continues to be supportive, while the 1.34 level above offers resistance. The fact that we bounce from the bottom should not be a huge surprise at all.

GBP/USD Video 21.12.21

The market is likely to continue to see a lot of choppy behavior, as well as somewhat tightly wound range trading so therefore you can take advantage of it, but you have to be cautious about your position size. After all, the market can suddenly spike due to a lack of liquidity, so that something that you need to pay close attention to.

With that being the case, keep your position size small enough that if we do get a sudden jittery move based upon a headline or just a large book being close down, you do not get too damaged. This is particularly prudent advice anytime, but it is especially important during this time of year. The last thing you want to do is suddenly wreck your account based upon some type of knee-jerk reaction that would be unforeseen.

For a look at all of today’s economic events, check out our economic calendar.