GBP/USD Price Forecast – Pound Continues to Chop Back and Forth

The British pound has rallied a bit during the trading session on Friday, breaking above the 1.36 level after the Nine Farm Payroll announcement came out at a 140,000 loss for the month of December. Because of this, it looks like there will be a massive push for stimulus yet again in the United States, which of course should continue to weigh upon the greenback more than anything else.

GBP/USD Video 11.01.2021

That being said, there are a lot of issues out there when it comes to the British pound, not the least of which is the fact that the UK economy is locking itself down. Ultimately, the trend is to the upside, and it looks like we are going to break higher given enough time. Ultimately, I think that we are in a “buy on the dips” type of market more than anything else. Over the longer term, I do believe that the British pound will continue to grind higher, mainly due to the fact that we are historically cheap. Beyond that, this is more about the US dollar than anything else.

To the downside, the 1.35 level should offer significant support, just as the 50 day EMA underneath near the 1.3350 level should offer support. At this point, the market is likely to continue to see plenty of support, assuming that we can even get towards that area. The last couple of days have been choppy, but quite frankly the overall trend has been very bullish for some time, and I just do not see that changing anytime soon. At this point, the market is very noisy, but it certainly seems to have an easier time going higher over the longer term.

For a look at all of today’s economic events, check out our economic calendar.