GBP/USD Price Forecast – British Pound Continues to Climb

The British pound continues to outperform almost everything right now, as it looks like it is trying everything it can to get to the 1.35 level against the US dollar. That obviously is a large, round, psychologically significant figure, so it does make a certain amount of sense that we would be attracted to that level. Whether we can break above there in the short term is a completely different question, but I do think that the one thing you should take away from this chart is you cannot short this pair.

GBP/USD Video 29.12.21

I can make an argument for buying dips, assuming that we get any. The jobs number next week will be the next major catalyst for currency markets, and I think by the time we get through that, things will start to show a lot of clarity in this pair as well as many others. Currently, I do believe that the 1.35 level will be a significant barrier. However, if we break above there, especially after the jobs numbers, that would be a very strong sign that we were turning around completely.

To the downside, I see support at 1.34, and of course at 1.33 underneath. The 50 day EMA probably also will offer a bit of support if and when we pull back to it, but as we get closer to New Year’s Day, I think we are simply trying to grind our way to that 1.35 handle to close out the year. Keep in mind liquidity is going to be an issue for the next 10 days or so, so be cautious about jumping in with too big of a position at one time.

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