GBP/USD Price Forecast – British Pound Pulling Back

The British pound has initially surged higher to kick of the trading session on Wednesday but gave back the gains in order to show signs of testing the 1.32 level. At this point, the British pound certainly looks very bullish, but we are approaching significant longer-term resistance above. With that in mind, it looks as if the Pound is probably going to take a little bit of a break in order to build up enough momentum to continue the move higher.

GBP/USD Video 20.08.20

Keep in mind that the Federal Reserve continues to flood the market with liquidity and that of course drives down the value of the US dollar in general. With that being said, it does make sense that we continue the upward trend, but we may need to come back down a bit in order to find enough support. Longer-term, I believe that this pair goes looking towards the 1.35 handle, but we have made quite a bit of progress in a short amount of time so do not be surprised at all if this is more of a grind in the short term.

After all, markets do not go in one direction forever, and therefore it should not be a huge surprise that we are taking a bit of a breather after breaking through resistance yet again. Underneath, I look at the 1.30 level as significant support and if we were to break down below there, I would have to rethink some things, but that would not necessarily make me bearish quite yet. Buying dips should continue to be the best way forward.

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