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

The British pound rallied a bit during the trading session on Thursday, but then pulled back a bit to show a certain amount of weakness. That being said though, the most important thing you should pay attention to is the fact that the liquidity and volume would have been rather low, due to the fact that most traders are paying attention to the fact that it is New Year’s Eve. Ultimately, as we head into the first week for the month of January, it is very likely that we will continue to see a bit of US dollar negativity, but things are getting a little bit overextended at this point.

GBP/USD Video 04.01.2021

That being said, I think there is significant support underneath at the 1.35 level, and therefore I believe that a pullback will probably offer a bit of value the people will be taking advantage of, perhaps extending down to the 50 day EMA after that. All things being equal, the British pound should continue to go higher next year, and that is the overall theme that I have for the pair. A lot of this comes down to stimulus in the United States, which should continue to work against the greenback, but the British pound may be a bit of a laggard in general though, because we have so many issues when it comes to the UK economy.

Nonetheless, it looks like we are going to continue to sell the US dollar next year, so pullback should continue to be thought of as potential buying opportunities.

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