GBP/USD Price Forecast – British Pound Continues to Attempt to Break Out

The British pound has pulled back just a bit during the course of the trading session on Wednesday but continues to struggle with 1.42 handle. 1.42 handle is an area where we have seen a lot of resistance in the past, so it does look like we are trying everything we can to break out above that level and as a result we have shown quite a bit of resiliency, despite the fact that we had a pullback. In fact, the market has already started to rally again to reach towards 1.42 handle, so this suggests to me that we are eventually going to break out.

GBP/USD Video 20.05.21

If we can break above the 1.42 handle, especially if we can get a daily close, the market should then go looking towards the 1.45 handle. The 1.45 handle is a major round figure that a lot of people will be paying close attention to, and of course it makes a lot of sense that there would be a major reaction in that area. Currently, if the market pulls back, I think there should be a significant amount of support near the 1.40 handle, which is also being backed up by the 50 day EMA. All things being equal, this is a market that some people are looking at through the prism of a “double top”, while others are looking at it as being a market that is trying to break out. I believe it is the latter of the two, especially as we have been so stubbornly bullish for some time. Because of this, I have no interest whatsoever in trying to short this market.

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