GBP/USD Price Forecast – British Pound Continues to Build Basing Pattern

The British pound has initially pulled back just a bit during the course of the trading session on Tuesday only to turn around and show signs of life again. The market is hanging about the 1.3250 level, an area that has been of interest over the last week or so. Ultimately, I think this is a market that will eventually find it selling pressure above, as there has been such a massive downtrend. Furthermore, the Bank of England remains very dovish and of course the United Kingdom is shooting itself in the foot with the desire to shut things back down again.

GBP/USD Video 15.12.21

When you look at the growth around the world, it is obvious that the United States leads the way going forward. If that is going to be the case, then the market is going to reward the US dollar eventually. Furthermore, we also have the Federal Reserve looking likely to accelerate tapering, and that could drive the value of the US dollar higher. In the short term though, we are a bit oversold and this market so it makes a certain amount of sense that we would see a bounce in the short term. Nonetheless, I think that is the key phrase here: “short term.”

If we break down below the recent lows, then it is very likely that we will go towards 1.30 level, an area that of course is a large, round, psychologically significant figure. If we were to break down below there, then it is very likely that we would see the British pound completely collapse.

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