GBP/USD Price Forecast – British pound pulls back on Wednesday

The British pound broke down during the trading session on Wednesday, falling towards the 1.3150 level. At this point, it’s very likely that we will find some type of support underneath, perhaps even as low as 1.30 if things get ugly.
Christopher Lewis
GBP/USD daily chart, March 21, 2019

The flavor of the day is down when it comes to the British pound, but we’ve seen this movie before. Quite frankly what happens is that the markets will find value underneath it people continue to take advantage of, and therefore it’s likely that we are going to see plenty of volatility. Remember, the headlines continue to go back and forth when it comes to the Brexit, so it shouldn’t be much of a surprise that nobody knows what to do.

GBP/USD Video 21.03.19

The Federal Reserve is on tap as well, so keep that in mind. If the Fed sounds as dovish as the markets hope they do, it’s possible that the greenback will sell off. If that happens, then it should help the British pound overall. To the upside, the 1.3350 area is significant resistance, so it’s difficult to imagine breaking above there easily, but it does look like we are trying to build up the necessary pressure. Eventually we will break above there in continue going to the 1.35 handle.

To the downside, the 1.30 level should continue to offer plenty of support, so if we were to break down below that level it would be a very negative sign, and potentially could send this market down to the 1.28 level. I still like buying pullbacks in this market as they offer plenty of value, and of course we have been in the process of trying to change the trend, which of course is always a messy affair.

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