GBP/USD Price Forecast – British pound finding support

The British pound rallied a bit during the trading session on Monday after initially trying to drop during Asian trading. Quite frankly, with the Chinese putting more tariffs on the Americans, this of course has the markets a bit concerned as it could represent an escalation of the trade war coming down the road. Ultimately though, we also have to wear about the Brexit so there’s that noise to be handled as well. For the time being, the Brexit is a little bit in the background though, because we do have that extension that was recently signed as far as when it had to happen.

GBP/USD Video 14.05.19

What I would also point out is that the 1.30 level has offered significant support, which is very important to consider as it is a large come around, psychologically significant figure, and of course could continue to attract a lot of attention. Remember, currency pairs tend to like these big brown figures, and 1.30 is about as big and around as it gets.

Beyond that, the British pound is historically cheap, so that’s something that you should keep in mind as well. Longer-term traders will be looking to pick up the British pound based upon value, especially those who can handle hanging onto a position for months, if not years. Because of this, I feel that there is a little bit of a building floor to this pair now. If we do break down below the 1.30 level significantly though, we could go down to the 1.28 level. To the upside, if we break out above the Friday highs, then I think the market probably goes towards the 1.32 handle.

Please let us know what you think in the comments below