GBP/USD Price Forecast – British Pound Recovers

The British pound has initially fallen during the trading session on Thursday but recovered quite a bit as we are starting to see a little bit of resiliency creep back into this marketplace. Over the last couple of days, we have seen a move higher, followed by a move lower, followed by a recovery. I think this is indicative of a market that is ready to continue consolidating, which makes quite a bit of sense considering the time of year tends to be very slow. Furthermore, the British pound has recently made a significant move higher, so again, it makes sense that we go to the upside.

GBP/USD Video 21.08.20

To the downside, the 1.30 level underneath should offer plenty of psychological and structural support, so I do think that we break higher eventually. Having said that, it is definitely a market that will shake a lot of people out right now. That is okay, it is what markets do. Longer-term, I believe that this pair goes looking towards the 1.35 handle, but it does not mean that we have to get there in a straight line.

Pullbacks at this point will find plenty of support at 1.30 but if we break down below there then the next major support level that I see is in the form of the 1.2750 level. Notice how I did not mention anything about selling this pair, because quite frankly I do not see the set upcoming anytime soon. As long as the Federal Reserve continues to show its proclivity to loosen monetary policy, it is hard to imagine that this market is going to change its attitude longer term.

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