GBP/USD Price Forecast – British Pound Continues to Stabilize

The British pound has pulled back a bit during the trading session on Thursday, but continues to find buyers just below the crucial 1.32 handle. By doing so, it looks as if we are getting closer to some type of bounce in the British pound, which we have already seen in other currency such as the Australian dollar and the Euro. If that is going to be the case, I anticipate that the market probably goes looking towards the 1.33 handle, where we start to see a lot of wicks from negative candlesticks.

GBP/USD Video 10.12.21

To the downside, if we were to break down below the lows of the last couple of days, the British pound could really start to unwind and go looking towards the 1.30 handle, which is my longer-term target. That being said, you can see that the momentum is almost certainly slowing at this point, because even as we have been grinding lower, the candlesticks have shown less and less conviction. Because of this, I think that it is probably only a matter of time before we see an attempt to bounce, if for no other reason than the simple fact that the sellers are starting to run out of momentum.

This does not necessarily mean that I think the British pound is going to turn around long-term, just that things are overdone and a bounce towards the 50 day EMA would not be out of the question. That being said, keep in mind that this pair of course has a certain amount of a risk appetite element to it, as the US dollar of course is a major safety currency.

For a look at all of today’s economic events, check out our economic calendar.