GBP/USD Weekly Price Forecast – Pound Continues to Pressure Resistance

The British pound initially fell during the course of the week but then turned around to show signs of life again. It looks as if we are trying to break above the 1.3750 level, an area that has been important more than once. That being the case, I do think that it is only a matter of time before we try to break to the upside, due to the fact that the British pound is historically cheap, and of course we have gotten past Brexit. That being said, this market is a little overdone and a little stretched, so do not be surprised at all to see some type of pullback.

GBP/USD Video 01.02.21

That being said, the 1.35 level underneath should be massive support, assuming that we even get enough of a pullback. Ultimately, I think that this is a scenario where eventually we do break out and go looking towards the 1.40 level, possibly even the 1.4250 level after that. Having said all of that, if we were to break down below the 1.35 handle, then it is possible that we could go down towards the 1.32 level where the 200 week EMA currently sits. While the market does look somewhat bullish, I do think that it is only a matter of time before we need to pull back a little bit in order to build up more momentum in a market that is probably just a bit of her stretched in the short term. I have no interest in selling this market anytime soon as it looks like we are going to continue to see US dollar weakness.

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