GBP/USD Price Forecast – British pound showing strength on TuesdayThe British pound rallied significantly during the trading session on Tuesday, breaking back above the 1.31 level after drifting lower. We are testing the 1.3150 level as I record this video, an area that was the most recent high.
The British pound has rallied significantly during the trading session on Wednesday after initially dipping below the 1.31 handle. This is a sign of underlying demand, and when you look at the longer-term charts it’s likely that there is plenty of demand underneath as well. The 1.30 level is an important level that people have been paying attention to for some time. Because of this, I think that we will eventually see reasons to go the market long in this market. The market continues to be very noisy, because we have seen so much in the way of drama coming out of the United Kingdom as far as political theater is concerned, and quite frankly those questions continue to plague the Sterling.
In general, this is a marketplace that should continue to see buyers on dips, but you will need to be very patient with these trades as there are a lot of things going on in the United Kingdom that has people very nervous. I would be very small with my trading position, because quite frankly we could get quick turnarounds in the blink of an eye. The market participants out there continue to be very difficult to deal with, but eventually we will make a longer-term decision. I suspect that longer-term decision is to go to the upside, but we need some type of agreement coming out of the United Kingdom to offer a bit of certainty to the marketplace. The markets hate uncertainty, and you are seeing that in the overall action of the British pound.