GBP/USD Price Forecast – British pound treading water for TuesdayThe British pound went back and forth during the day on Tuesday but has done something rather important in the sense that the 1.3125 level looks to show signs of support after being broken to the upside. Currently, consolidation seems to be the way forward.
All things considered, the British pound is doing quite well. Keep in mind that I think are a lot of longer-term traders are starting to price in the idea of some type of Brexit agreement, and that has been lifting the market for a while. Beyond that, the British pound is historically cheap so that certainly hasn’t been lost on anyone either. I believe that the upward proclivity should continue, as it is a market that has seen its fair share of blood baths over the last several years. However, historically speaking this pair is much more couple closer to the 1.65 handle or so, so it makes sense that a lot of value hunters are coming in to pick up the pound here.
I think short-term pullbacks the 1.3125 level will continue to offer potential buying opportunities, but keep in mind that this pair breaking below the 1.31 level would be vulnerable for a move down another 100 pips, reaching the psychologically and structurally important 1.30 level at that point. In general, I believe that the market will continue its erratic behavior, and of course focus on statements coming out of the European Union and the United Kingdom when it comes to the Brexit. I think at this point selling is all but impossible and the pair is one that you buy on dips, trying to find value and adding as the market continues to go in your favor. Obviously, there will be shakeout occasionally as some errant headline will send the weak hands running.