GBP/USD Price Forecast – British Pound Recovers After Initial Weakness

The British pound initially fell during trading on Thursday but as the Bank of England sounded much more optimistic, this put a boost into the British pound, putting any serious fears of negative interest rates to bed. This of course is bullish for the Pound and now it looks as if it is ready to continue to try to press the 1.3750 level. If we can break above there, then it opens up the move towards 1.40 above, which could take some time. However, one thing that is sure to catch the attention of traders is just how much pressure there has been in that area, so it would make for a rather significant break out.

GBP/USD Video 05.02.21

To the downside, the 1.35 level offers support, and probably comes into play if we get back down there again. The 50 day EMA sits just above it, so I think that is about as low as this pair goes anytime soon. The US dollar is getting a little bit of a bit higher, but the British pound is historically cheap so do not be surprised at all if this particular currency outperforms many others against the US dollar in what could be a potential turnaround for the greenback. I do not have any interest in selling this pair, but if I were to buy the US dollar, it probably would be against other currencies. As far as buying the British pound, you may actually get more mileage buying it against the Swiss franc or the Japanese yen. Regardless, I do think that eventually we break out and go much higher, we just need a little bit more of a push to the upside.

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