GBP/USD Price Forecast January 31, 2018, Technical Analysis
The British pound has rallied significantly during the trading session on Tuesday, as the US dollar selling continued overall in the Forex world. Because of this, and the fact that the large, round, psychologically significant number was touched, the British pound rallied. I believe that we will continue to see bullish pressure in this market longer term, but we may get a short-term pullback first. That should give us an opportunity to pick out value when it appears and take advantage of it as we go to the upside.
If we break down below the 1.40 level, I think that it could be a negative sign, especially if we break down below the 1.39 handle, which I see as the bottom of the support “zone.” If we do that, it’s likely that we would go back to test the 1.3650 level which has been very important in the past. I believe that the market participants are more likely to be bullish though, if nothing else because of the greenback itself.
I believe that the market will eventually go looking towards the 1.43 level, and then possibly the 1.45 handle after that. When I look at this chart, it’s likely that we will see a lot of volatility, but that makes sense as the United Kingdom negotiates its exit from the European Union. Headlines will cross the wires occasionally the cause issues. Longer-term though, I believe we are going much higher.