GBP/USD Price Forecast – British Pound Continues to Show Resiliency

The British pound has initially fallen during the trading session on Friday only to see buyers come back into the marketplace and push higher. The 1.3750 level is an area that has been important more than once, and the fact that we keep “knocking on the door” suggests that we will eventually break through. At this point, it is very likely that the market then goes looking towards the 1.40 level above which is a large, round, psychologically significant figure, and an area where we have seen plenty of action in the past.

GBP/USD Video 01.02.21

On the other hand, we could break down again, but I still believe that the market finds plenty of support near the 1.35 handle, not only due to the fact that it is important on the longer-term chart, but the fact that the 50 day EMA is starting to reach towards that level. With this being the case, the fact that we continue to see bounces, I suspect that we are on the precipice of seen a significant break out, and therefore I remain bullish, maybe not necessarily due to the fact that I am overly excited about the British pound but perhaps it has more to do with US dollar softness.

That being said, the British pound is rallying against most currencies, mainly because we are trying to get back to historical norms now that we are past Brexit. With that being the case, I think it is very difficult to do anything other than buying dips at this point. The market continues to be noisy, but clearly, we are pressing the issue.

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