GBP/USD Price Forecast – British Pound Continues to Press Higher

The British pound has initially pulled back during the trading session on Tuesday but has turned right back around to show signs of strength again and ended up reaching towards 1.37 level. However, this is an area that also features a certain amount of resistance as of late, so do not be surprised at all to see a bit of a short-term pullback. Longer-term, I think a lot of this will be reliance on the FOMC meeting tomorrow, and whether or not Jerome Powell decides to suggest even more bearish pressure.

GBP/USD Video 27.01.21

We do need to worry about the UK economy as it is being locked down so aggressively, but at the end of the day it is difficult to imagine a scenario where this market turns around for a longer term, due to the fact that the Federal Reserve will do whatever he can to devalue the US dollar. They will do this through bond purchases, which drives down the interest rates offered. That of course is negative for the currency, and therefore it should translate into higher currencies against the greenback.

All of that being said, we need to see what happens with Jerome Powell between now and then so I would not expect a major move until after Wednesday afternoon. In the meantime, the 1.37 level extends resistance all the way to the 1.3750 level, as it has multiple times in the past. If we get above there, then we can really start to move but so far, the pair seems to be hesitating in this general vicinity, and without some type of catalyst coming out of the Federal Reserve I do not see that changing anytime soon.

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