GBP/USD Price Forecast – Pound Continues to Hang Onto Support

The British pound initially dipped a bit during the trading session on Thursday but found the 1.3750 level supportive yet again. That being said, the market is also hanging about the 50 day EMA, so with that being the case we are looking at this area as a potential floor, and of course the British pound has continued to see buyers jump in and try to pick this market up. That being the case, I do believe that this is a scenario that will play out as a simple correction in what has been a very strong uptrend on the longer term.

GBP/USD Video 02.04.21

For that matter, you could even stretch your artistic license a bit and called this a falling wedge. That obviously is a bullish sign, so if we can break out above the highs from earlier this week, then it is likely that the market could go to the 1.40 level. The 1.40 level being broken to the upside then allows the British pound to go looking towards 1.42 level yet again.

To the downside, if we were to break below the most recent lows, then we will probably go looking towards a major support near the 1.35 handle. That of course is a large, round, psychologically significant figure, and of course the area would be something that we should be paying close attention to. I favor the upside more than anything else, but if we were to break down below the 1.35 handle, then we could as significantly questions about the longer-term trend. That does not look likely at this point in time though.

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