GBP/USD Price Forecast – British Pound Runs Out of SteamThe British pound continued to rally during the early hours on Tuesday but has run out of steam to turn around. This is still a “buy on the dips” situation.
The British pound has initially tried to rally during the trading session on Tuesday but gave back the gains rather handily by the time that the Europeans were taking lunch. The 1.34 level continues to be resistance extending to the 1.35 handle, and I just do not think that we are able to break through it until we get some type of resolution with Brexit. While we are getting into so-called “crunch time”, that means that we are more than likely going to see a move sooner rather than later. At this point, the resiliency of the British pound should be noted, and therefore I look at pullbacks as buying opportunities.
GBP/USD Video 02.12.20
The 1.3250 level should be supported, and most certainly the 50 day EMA underneath there and near the 1.31 level will be. I think if you wait just a bit, you should get an opportunity to pick up the British pound at lower levels, and therefore buying on the dips probably works going forward unless of course we get some type of “no deal Brexit.” If we do, then obviously things will change and therefore we would have to reevaluate the entire situation. That being said, the British pound is historically cheap at these levels and of course the Federal Reserve continues to flood the markets with liquidity thereby driving down the value of the US dollar. If and when we do get some type of an agreement between the EU and the UK, that should send this pair through the 1.35 level and looking towards higher climes after that.
75% of retail CFD investors lose money
For a look at all of today’s economic events, check out our economic calendar.