GBP/USD Price Forecast – Continues to Chop After Recent Break Out

The British pound has broken out of the last couple of days, and now it looks like we are grinding sideways in order to either kill time, or perhaps pull back a little bit in order to build up even more momentum to the upside. After all, the British pound has broken to the upside from a major level, so at this point in time the markets tend to absorb some of that momentum, and of course people look for an opportunity to get involved. Quite frankly, the longer we stay above the 1.3750 level, then it is likely that we reach towards 1.40 level over the longer term.

GBP/USD Video 12.02.21

If we did break back below the 1.3750 level, that would be a very negative sign and probably send the British pound looking towards the 50 day EMA. That being said, I do not see that happening in the near term, and I think is much more likely that we get that 1.40 level above based upon the historic charts. The US dollar continues to get hammered due to the idea of stimulus, and of course the British pound continues to get a bit of a boost due to the fact that the British have distributed the vaccine much more successfully than most other countries, and of course have had massive lockdowns that have “bent the curve.”

All things being equal, I think that this is a market that continues to offer opportunities on short-term pullbacks. Quite frankly, now that Brexit is in the rearview mirror, and of course the UK may be ahead of other economies as far as heading back towards normalcy, it should be a strong uptrend over the longer term.

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