GBP/USD Weekly Price Forecast – British Pound Slams Into Resistance for the Week

The British pound has rallied significantly during the course of the week, reaching towards the 1.39 level before running into a little bit of resistance. That being said, the market is likely to continue seeing noisy behavior in general, and an attempt to break out to the upside as the US dollar has been so sold off. The British pound itself has its own issues, but its biggest advantage is that it is not the US dollar, meaning that we do not have to worry about the Federal Reserve loosening monetary policy in London. After all, if they are nowhere near raising interest rates, then that means that the US dollar has probably been overvalued for a while. With this being the case, I think what we are going to see here is the market build up enough pressure to finally make another move to the upside.

GBP/USD Video 06.09.21

On the other hand, if we were to turn around and break below the 50 week EMA, then it could open up a significant selling. I do not necessarily think that is the most likely of scenarios, but the reality is that it would obviously be a very ugly turn of events. In that scenario, we are probably looking at a move down towards the 1.30 handle. That would obviously be a major “risk off” type of event, and therefore I think it could throw havoc into the entire system. At this point though, it does not seem very likely that we are going to have all of that happen. Ultimately, I think this is a can quote buy on the dips” type of market.

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