GBP/USD Price Forecast – British Pound Heading Towards the Next Big Figure

The British pound has rallied again during the trading session on Thursday to reach above the shooting star from the Tuesday session. This is a very bullish sign and could suggest that perhaps the market is trying to reach towards the 1.40 level above. That is a large, round, psychologically significant figure, and therefore I think will attract a lot of attention. With that in mind, I do like the idea of waiting for a pullback still, because quite frankly you cannot chase these types of trades. The more parabolic a move is, the more dangerous the pullback becomes.

At this point, I would love to see a return to the 1.3750 level, or at least the 1.38 level. I do not know if we need to touch the 1.40 level before doing that, but clearly there will be a pullback sooner or later as we have gotten overstretched. The US dollar of course could have its say as we could get rising yields in the 10 year note again working against other currencies. I do not know that it will be felt as strongly here as it will and other currency pairs, but it should have some type of effect.

To the upside, if and when we can capture the 1.40 level, that should send the British pound looking towards 1.42 level based upon the longer-term charts. I am very interested in going long of this market, I just do not want to pay this price. Sometimes, patience is what will make more money than anything else.