GBP/USD Price Forecast – British Pound Testing Major FigureThe British pound has rallied significantly on Tuesday, reaching towards 1.36 level. It looks as if it is still trying to go to the upside.
The British pound has had a nice move to the upside during the trading session on Tuesday as it reached towards the 1.36 level rather early. That being said, the market still has a lot of noise just above, so I think it will continue to struggle a bit but at this point in time I believe that the market certainly looks as if it is a “buy on the dips” type of market, and I do think that will continue to be the theme going forward. Not only do we have optimism out there in the market when it comes to the idea of the global growth trade, but also, I think that stimulus in America still has further to go, so that will continue to look at the US dollar falling. That could be a major driver of the British pound going higher.
GBP/USD Video 13.01.21
It should also be noted that now that we are through Brexit, people will start to focus more on six months down the road once we are through the vaccine situation when it comes to Great Britain, and with a historically cheap British pound, it does tend to favor an upward move as well. The 50 day EMA underneath should continue to offer support, painted red on the chart. If we can break above the 1.3750 level above, then I think it opens up the possibility of a move towards the 1.40 level, which of course is a large, round, psychologically significant figure and therefore could cause a bit more trouble. I have no interest in shorting the British pound at the moment, as I do not see the catalyst for some type of meltdown.
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