GBP/USD Price Forecast – British Pound Flexing Muscles

The British pound has rallied quite a bit during the trading session on Tuesday, as we continue to see a lot of upward pressure. Given enough time, I fully anticipate that this market will go looking towards the highs again and break out. Longer-term, I anticipate that we will probably go looking towards the 1.35 handle, but it may take some time to get there. This is probably more indicative of the US dollar than it is the British pound, as the Federal Reserve continues to loosen monetary policy, and with Jerome Powell giving a speech at Jackson Hole this week, it is very likely he will start to talk about how the Federal Reserve looks at inflation. This of course will be crucial in how traders see the Federal Reserve and its dealings going forward.

GBP/USD Video 26.08.20

Jerome Powell do nothing to upset the markets, so more likely than not we will see him behave in a very dovish manner. That should bring up the value of other currencies against the greenback, which quite frankly helps the larger economic system due to the fact that it will help alleviate some of the debt issues around the world that are done nominated in greenbacks.

On pullbacks, I believe that the British pound does offer a bit of value, especially around the 1.30 level. That is an area that has been important more than once, and now looks to offer a little bit of a “floor” in the market. I do not have any interest in trying to short this pair, at least not until something fundamentally changes.

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