GBP/USD Price Forecast – British pound rallies to open the week

As soon as the British pound gapped higher on Monday, I started buying. I have since moved my stop loss to break even, because quite frankly there are far too many moving pieces when it comes to the United Kingdom and leaving the European Union, and of course we are now testing the 1.3350 level. On a daily close above that level, I think that the market can go much higher. I would target the 1.35 level in that scenario, and I believe that the gap from the beginning of the week at roughly 1.33 will now offer a bit of a “floor” in the market.

The market has been explosive to the upside, and I think that we should continue to find value hunters on short-term dips. That doesn’t mean that this is going to be the easiest trade in the world to take, but I do think that eventually we could break out to the upside. The US dollar looks to be on its back heels at the moment, and I think that the British pound in the Euro both will be beneficiaries. However, if we were to turn around and break down below the 1.3275 level, then we will probably continue to fall towards 1.32 handle after that. At this point, I still consider myself a “buy the dips” trader when it comes to cable and see no reason to be a seller.

GBP/USD Video 10.07.18