GBP/USD Price Forecast – British pound continues to recover

The British pound rallied significantly during the trading session on Wednesday, as Jerome Powell has suggested that the Federal Reserve is willing to cut back interest rates. With that being the case it makes sense that the US dollar falls, and we are starting to see that around the world. The British pound will be any different, as the 1.2750 level will cause resistance, I think that we could probably break above there and go looking towards the 1.28 level.

GBP/USD Video 06.06.19

With that in mind I believe that if we can close above the highs of the trading session we will probably test the 1.28 level. That level opens the door to the 1.30 level, which would be a significant turn of events. Look for signs of exhaustion and start selling, because quite frankly the problems with the Brexit are far from over and we will probably continue to struggle in general. We had been a bit oversold, so this isn’t a huge surprise. To the downside I still see the 1.25 level as an area that the market will try to target, and I also see it is a major area of support.

Either way, I would keep my position size relatively small, as we will certainly see a lot of volatility in this pair, as it is so news driven lately. I favor the downside but recognize that relief rallies can and will happen. The only way to deal with this type of market is to keep your risk relatively low.

Please let us know what you think in the comments below