GBP/USD Price Forecast – British pound bounces from major number on Wednesday

The British pound has initially pulled back during the trading session on Wednesday, but found the 1.31 level underneath as supportive, and we bounced about 30 pips into the US session. I believe at this point the 1.31 level will continue to offer support, and I think that until the Bank of England gets involved, it’s very unlikely that this market is going to have huge moves. I believe that short-term pullbacks will probably be buying opportunities, but most of what’s going to happen will be dictated by the statement that comes out of London. An interest rate hike is expected, so it’s going to be the wording of the statement that attracts the most attention.

If the Bank of England sounds likely to raise interest rates in the future, that should be very positive for Sterling, but if this looks like a “one and done” situation, we may get a bit of the selloff. The 1.32 level above should be resistance, but if we can break above there we could go much higher. I think that if we break down below the 1.31 level handily, then we will go looking for more significant support at the 1.30 level. That’s an area that is supportive longer term, and I would be all over that without a doubt, giving us plenty of opportunity to pick up major value.

GBP/USD Video 02.08.18