GBP/USD Price Forecast – British Pound Continues To Try To Break Out To Upside

The British pound rallied a bit during the trading session on Thursday in order to break above the gap that had formed at the beginning of the week. Now that that gap has been filled, it becomes a question as to whether or not it will hold.
Christopher Lewis
GBP/USD Price Forecast - British Pound Continues To Try To Break Out To Upside

The British pound has rallied a bit during the trading session on Thursday to not only fill the gap but did break through it slightly. Having said that, we did pull back a bit in the middle of the day, so at this point it will be interesting to see whether or not we can continue higher. I believe that will be the case, as the gap wasn’t a major gap, and of course the 50 day EMA continues to offer support.

GBP/USD Video 17.01.20

Furthermore, the 1.30 level is a large, round, psychologically significant figure as well as the top of the bullish flag that previously had sent the market towards the 1.35 handle. That bullish flag measures for a move towards the 1.38 handle, and of course we have not hit that level yet. That being said, I believe that longer-term traders will still be looking towards the level as a target. That doesn’t mean that it’s going to be easy, and clearly, we have a lot of volatility ahead of us. However, the British pound has stabilized a bit over the last several weeks, as we continue to grind back and forth and try to decide where we go next. I don’t have any interest in shorting this pair, at least not at this point in time mainly because I recognize that the bullish flag extends all the way down to the 1.28 level as far as the body of it is concerned, so there should be a lot of order flow in that general vicinity.

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