GBP/USD Price Forecast – British pound rallies in volatile session on Wednesday

The British pound has rallied during trading on Wednesday, and what would have been a very illiquid market as the Americans were celebrating Independence Day. Overall, I believe that the market will continue to go towards 1.33 level above, and possibly beyond that assuming everything remains the same. However, keep in mind that the market participants will have to deal with the trade war fears and of course the unknown when it comes to the United Kingdom leaving the European Union, so headlines can change things in the blink of an eye.

If we turn around and break down below the 1.3150 level, then I think it’s time to start selling again as the market should drop down to the 1.31 handle, and eventually the 1.3050 level again. Otherwise, if we break out to the upside, especially if we can break above the 1.33 handle, the market should then go to the 1.3450 level again which had been resistance in the past. Overall, think of this as a “risk on” barometer as the pair tends to move higher in times of economic certainty. That’s going to be hard to achieve in the current environment, so at this point I think it’s likely that the market will chop back and forth more than anything else. That being said, keep your position size small and keep in mind that most of the liquidity will still more than likely be missing in America as traders tend to take the rest of the week off in the situations.

GBP/USD Video 05.07.18