GBP/USD Price Forecast – British Pound Continues to Build Up a Case for Break Out

The British pound has rallied just a bit during the trading session on Thursday, as we continue to try to build up the necessary momentum to break out to the upside. With that being the case, the market is probably going to be very choppy, but the 1.42 level is so important that it would not surprise me at all to see several attempts be made before we finally get that breakout. On a daily close above the 1.42 handle, this market could very well rise another 300 pips.

GBP/USD Video 21.05.21

The United Kingdom is starting to open up again and the economic numbers continue to impress. Furthermore, the US dollar is on its back foot for a multitude of reasons, not the least of which is that the Federal Reserve has flat-out stated it was going to let the economy run hot, meaning that they would be loose with monetary policy for quite some time. If that is going to be the case, then it makes quite a bit of sense that the pair continues to climb.

Quite frankly, I do not think that this is a market that will have an easy move to break out, but it certainly looks as if it is going to try to do so. Yes, there is the potential that people could be thinking “double top”, but there is no real fundamental reason for that to be the case. We could get a little bit of a pullback, but I think that simply will be yet another opportunity to build a base to go higher. Ultimately, I have no interest in shorting this pair anytime soon.

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