GBP/USD Price Forecast – British Pound Gives Up Early Gains

The British pound initially rally during the course of the trading session on Tuesday to reach towards the 1.39 level. That is an area where we have seen resistance over the last several days, and by turning around and forming this shooting star, that suggests that we are ready to continue to go lower. After all, we have formed a bit of a “H pattern” which is a very negative sign. Because of this, I think that the market is more likely than not to go down towards the 200 day EMA, which also ties in quite nicely for the 1.37 level, an area that has been supportive more than once.

GBP/USD Video 07.07.21

On the other hand, if we can break above the top of the shooting star for the trading session on Tuesday, then that could open up a move towards 1.40 handle. That is an area that of course will attract a lot of attention as it is a large, round, psychologically significant figures in the process. If we can break above the 1.40 handle, then you could go looking towards the 1.42 level, an area that is massive resistance, as we have seen multiple times.

If we were to somehow turn around a break above that it would change everything, but clearly, we have no real chance of going so anytime soon, so if we break down below the 1.37 handle, it is very likely that we go looking towards 1.35 handle, which is another large, round, psychologically significant figure. Breaking down below that opens up a massive move lower, and a longer-term trend change.

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