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Christopher Lewis
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GBP/USD

The British pound has rallied again during the early hours on Tuesday as it looks like we are going to go looking towards the 1.42 level, an area that had previously been significant resistance. With that being the case, I think what we are seeing here is an attempt to break out, but I would be a bit surprised if we did it straightaway. Do not be surprised at all if we see a short-term pullback that we bought into as we are trying to build up the necessary momentum.

GBP/USD Video 12.05.21

Either way, this is a scenario where you cannot be a seller of the British pound, it has been far too stubborn as of late to try to fight. That being said, I like buying dips and of course a daily close above the 1.42 handle as it opens up the possibility of a move to the 1.45 handle. With that in mind, I definitely have a “one-way mind” when it comes to the British pound, because it has exploded to reach this area, and now we have formed a very strong bottoming pattern that suggests that we are ready to continue the overall uptrend. The US dollar itself is breaking down quite drastically, and that of course will be a good sign for the British pound as well.

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Furthermore, the UK economy is getting ready to open up again, and that has traders banking on the idea that there will be more demand for the Pound going forward, not to mention the fact that there is such a bearish pressure on the greenback as the United States looks to spend roughly $10 trillion this year if things go as planned.

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

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