GBP/USD Price Forecast – Pound Sitting Just Above Previous Resistance

The British pound has gone back and forth during the trading session on Wednesday, as we see a lot of noise in this general vicinity. It is worth noting that the market breaking through the previous resistance should find support in this general scenario and region. That being said, I do think that we are more than likely going to see a lot of noise in this general vicinity, so I think that a short-term pullback should continue to offer buying opportunities given the fact that the British pound simply will not go away.

GBP/USD Video 07.01.2021

Add to the mix the idea that the “blue wave” seems to have happened in the United States, that means that the US dollar will probably eventually be eviscerated, as spending will be a major function of US monetary policy going forward. Stimulus probably only increases from here, and therefore it should continue to work against the greenback overall. That being said, we have a lot of headwinds out there when it comes to growth, especially in the United Kingdom. In other words, I think that we will chop back and forth in order to finally reach higher levels. With this being the case, I think that short-term pullbacks will continue to be offered as buying opportunities, especially with the 1.35 level being a large, round, psychologically significant figure.

The 50 day EMA is racing towards the 1.35 level as well and sloping higher. Ultimately, I think it is only a matter of time before buyers jump back in and pick up value as it is offered. I have no interest in shorting this pair, because I believe that the US dollar is about to have a very rough year.

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