GBP/USD Price Forecast – British pound continues to levitate

The British pound continues to rally as we have seen it defy gravity. However, when you see a move like this you understand that there’s a good chance you will get a pullback. That pullback should be thought of as value, and now I believe that the “floor” in the pair is closer to the 1.30 level. Obviously, we need a significant pullback to get there which would probably take several days, but that’s what I’m hoping to see. Buying at these high levels is very difficult to do, simply because momentum will eventually slow down.

GBP/USD Video 28.02.19

I do believe that we will eventually go looking towards 1.35 level, and I also believe that the British pound has bottomed completely. It is because of this that I have no interest in trying to short this market, regardless of how extended it gets. Obviously, the headlines out there about Brexit will come out occasionally to move this market, but you should look at fear as a potential buying opportunity. This is a market that has turned itself around longer term, and it’s very likely that we will continue to see a lot of short covering and of course value hunting.

Chairman Jerome Powell speaking in front of Congress could also soften the US dollar bit further, so that’s the second part of this trade. Ultimately, this is a “buy only” situation, but patience will be needed as you don’t want to “pay up” out of a simple fear of missing out.

Please let us know what you think in the comments below