GBP/USD Price Forecast – British Pound Showing Signs of Life Again

The British pound has shown itself to be rather resilient during the trading session on Wednesday as we initially fell but then turned around to form a bit of a hammer. The hammer of course is a bullish sign, but most importantly we are in a market that is ready to continue to go higher, perhaps reaching towards the 1.42 level longer term. To the underneath, I believe that the 50 day EMA is going to continue to be crucial, and therefore I think that a lot of traders are looking to get involved at this point in time. Dips continue to show signs of being bought into, so buy this market, not sell it.

GBP/USD Video 11.03.21

All things been equal, I think that we go back towards 1.42 level but there are a couple of areas that could cause some issues. The first one of course would be the 1.40 level, which is a large, round, psychologically significant figure, and an area where we have seen a certain amount of selling previously. If we can break above that level, then it opens up the move to that previously mentioned 1.42 handle. I have no interest in shorting this market anytime soon, at least not until we were to break down below the 1.35 level on a daily close. I do not see that happening anytime soon, so I am looking for an opportunity to buy and not sell at all points in time. However, if we did break down below the 1.35 level then I think we could open up about a 500 point drop.

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