GBP/USD Weekly Price Forecast – British Pound Recovers Initial Losses for the Week

The British pound has initially fallen during the course of the week but then found quite a bit of support near the 1.37 handle, an area that has been important more than once. Because of this, I believe that the market will probably continue to see more of a “buy on the dips” type of mentality, as the US dollar is getting hit against most currencies these days. With that being the case, I think that it is probably only a matter of time before we see traders get involved on these dips, and perhaps challenge the 1.40 handle above which is a large, round, psychologically significant figure that a lot of people will be paying close attention to.

GBP/USD Video 13.09.21

If we were to turn around a break down below the 1.37 handle, that would obviously be a very bearish sign, and it could send this market reeling. At that juncture, I would anticipate that we would see a lot of selling pressure, perhaps sending this market towards the 1.35 handle. At that juncture, if we were to break down below that level, it is obvious that this market would give up most of the gains that it has enjoyed over the last couple of years.

Regardless, it seems as if the Federal Reserve is going to be ultra-loose with its monetary policy regardless of what happens next, so I think you should keep that in mind. I would expect choppy behavior, but it certainly looks as if the British pound is going to make a go at taking out the 1.40 handle above. I anticipate headaches going forward for shorter-term trader, but longer-term traders are going to keep looking at the 1.42 level as the price.

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