GBP/USD Price Forecast – British pound rally significantly to kick off week

The British pound rallied significantly to kick off the week on Monday, reaching towards the 1.31 handle as I write this article. The market has found the 61.8% Fibonacci retracement level to be very supportive.
Christopher Lewis
GBP/USD daily chart, March 12, 2019

The British pound has rallied significantly during the trading session on Monday, reaching towards 1.31 handle. This of course is a good sign, as the market had pulled back rather stringently during the previous week. We found the 61.8% Fibonacci retracement level supportive enough to turn things around, and it now looks as if we are ready to go looking towards the highs again. This is a market that has recently broken above a downtrend line, pulled back to test it, rallied again, and now looks like it’s going to rally to form a “higher low.” This is the very essence of an uptrend.

GBP/USD Video 12.03.19

As we go through the Brexit process, there will of course be headlines to be concerned about, but those pullbacks continue to be buying opportunities for those who are quick enough to take advantage of them. Overall, it looks as if the market continues to see pullbacks as value that can be taken advantage of, as the British pound is historically cheap currently. The Federal Reserve on the other side of the equation of course has stepped away from a hawkish stance, so it’s very likely that we will continue to see a “buy on the dips” mentality going forward.

There are some very serious votes coming over the next couple of days as to whether or not British Parliament is going to go along with Teresa May, but quite frankly I believe that unless it’s obvious that we are going to have a “no deal Brexit”, we have seen the bottom.

Please let us know what you think in the comments below

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