GBP/USD Price Forecast – British Pound Continues to Levitate
The British pound initially pulled back during trading on Friday but turned around almost immediately to go positive again. We are currently hanging up above the 1.34 handle, and it looks like we are going to try to get to the 1.35 handle. Whether or not we can do that quickly is a completely different story, considering that liquidity is going to be a major issue over the next couple of trading sessions. Because of this, I suspect that you need to see a reasonable pullback to get involved, perhaps something down near the 1.33 level.
GBP/USD Video 27.12.21
If the pair was to break above the 1.35 handle, then that would be an extraordinarily bullish sign, perhaps sending this market much higher. We will probably get those answers early in January, when traders get back to work. One thing is for sure, Sterling has bounced quite nicely and that is something that should probably be paid attention to. In fact, when you look at the British pound against almost everything it has been very strong in its countertrend rally.
If we were to break down below the 1.33 handle, then I think we go looking towards the bottom again. That would mean 1.32, and then breaking down below that could open up 1.30. The way things stand right now though, it certainly looks as if the British pound is trying to change this overall direction, so this will be one of the pairs to watch once we get back to full trading. Keep your position size reasonable, a sudden spike could be very dangerous to your account.
For a look at all of today’s economic events, check out our economic calendar.