GBP/USD Price Forecast – British Pound Breaks Through Initial Support

The British pound has been rather resilient for some time, but recently has started to break down a bit under the pressure of US dollar strength in general. Because of this, we have sliced through the 1.3750 level, an area that has been important more than once and was the beginning of support from what I had seen. Now that we are below there, it is possible that we go looking towards the next major support level in the form of 1.35 underneath, which is a large, round, psychologically significant figure that will attract a lot of attention. Furthermore, the 200 day EMA is starting to race towards that area so I think it makes quite a bit of sense that people will be paying attention to it.

GBP/USD Video 25.03.21

Quite frankly, most of this is going to be about US dollar strength more than anything else. As long as the US dollar continues to strengthen in general, I think that we have an argument to be made for the market to go looking towards the 1.35 handle. I do not necessarily think that we are going to change the longer-term trend, but clearly higher yields in America continue to be a major factor in where we are going, and of course where we have been as of late.

To the upside, if we were to recapture the 1.3750 level on a daily close, then I think the market will go looking towards 1.40 level where we had seen a lot of selling as of late. After that, then the market almost certainly would go looking towards the 1.42 level which is massive resistance on a weekly timeframe.

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