GBP/USD Price Forecast – British Pound Rallies a Bit

The British pound initially bounced during the trading session on Monday, but as you can see gave up some of the gains to show less than spectacular gains. We struggle to keep up the same type of momentum that we had on Friday, which is a big red flag that I see at the moment. Furthermore, we are still dealing with the bit of a “H pattern.” The “H pattern” is a rather negative turn of events, but we also have significant support underneath that could come into play near the 1.37 handle.

GBP/USD Video 06.07.21

Speaking of the 1.37 handle, not only has it previously been supportive, but it has also has the 200 EMA approaching it and flattening out, so I think there is going to be a lot of fighting in that area. If the 1.37 level gets broken below, that opens up quite a bit of selling pressure. To the upside, if we can break above the 1.40 handle, then it would be extraordinarily bullish. Until we can manage to do that, I am a little bit hesitant to buy the British pound simply because I see the US dollar trying to break out on the US Dollar Index.

There is a little bit of optimism about the reopening trade in the United Kingdom, but one of the things that we need to keep in mind is that the Friday candlestick was heavily influenced by a lack of volume and of course short covering heading into the Independence Day holiday weekend. Another thing to keep in mind is that the Americans were away from their desks on Monday as well.

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