GBP/USD Price Forecast – British Pound Continues to Find Support

The British pound has had a fairly remarkable turnaround after initially selling off during the trading session on Tuesday, as an EU official suggested that there has been an agreement made “in principle on all things” between the United Kingdom and the European Union. If this is in fact true, this could be a huge turnaround for the prospects of the British pound, and therefore could send it much higher. I continue to pay attention to the 1.35 level, because once we break above there on a daily chart that will be a major breakout. It should be noted that the market clearly expects some type of deal, because every time there is the slightest hint of positivity, we turned right back around immediately. In other words, traders “want” this to happen.

GBP/USD Video 09.12.20

Obviously, there are a lot of concerns and possibilities out there when it comes to damage, but at the end of the day it is very likely that we will eventually break out. After all, the British pound is historically cheap and then on the other hand you have to keep in mind that the US dollar is on its back foot anyway. If that is going to be the case, that in and of itself could provide a little bit of a natural buffer to the downside in this market regardless. However, if we were to suddenly get a “no deal Brexit” going forward, that could cause massive disruption in this pair, and habit dumping towards the 1.30 level rather quickly. It is the same story it has been for a while, buying dips continues to be the preferred method of trading the British pound.

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