GBP/USD Price Forecast – British pound takes off during early Tuesday oursThe British pound has rallied rather significantly during early trading in two’s action, but as you can see we are starting to run into a little bit of resistance at previous trouble in the form of the 1.3250 level.
The British pound continues to struggle a bit near the 1.3250 level, which makes a bit of sense as we still have plenty of headline risk out there when it comes to the Brexit. I think that the 1.3250 level being broken to the upside would be an extraordinarily strong sign, but I also believe that we need some type of breakthrough in the Brexit negotiation for that to happen. Until it does, I anticipate that we will probably continue to struggle to get above there, and quite frankly it would not surprise me at all to see a return to the 1.31 handle.
I believe that below there, the 1.30 level is massive support, and of course will continue to be watched quite closely as the market participants always keep an eye on large numbers as such. I think that the market will eventually break out to the upside but I do think we are more likely to see a bit of a pullback in the short term than anything else. I have no interest in trying to hang onto a short position, but I do recognize that short-term traders may be able to profit from a small draft lower.
The alternate scenario of course is a break above the 1.3250 level, which would send this market much higher, perhaps as high as 1.35 eventually. We obviously would need to see some type of catalyst for that to happen though, and quite frankly the only one that is likely would be the Brexit negotiations finally settling down.