GBP/USD Weekly Price Forecast – Showing Signs of Forcing a Breakout

The British pound has initially fallen during the course of the week, but once the Bank of England had its meeting and press conference, the market turned right back around to scream to the upside. The candlestick for the week does look like a hammer, but if we were to break down below it then becomes a “hanging man.” In other words, we are about to do something and that something could be big. I believe that the 1.3750 level above is being pressured, and if we can clear above that on at least a daily close, it is likely that we could scream to the upside, perhaps reaching as high as 1.4250 based upon the weekly structure.

GBP/USD Video 08.02.21

However, if we were to turn around a break down below the 1.35 handle, that could spell serious trouble for the British pound as it would confirm this candlestick as a “hanging man”, which of course is a very bearish sign. That being said, there are a lot of things to consider when trading this pair, but right now I believe that as long as we are in this little range, you cannot be a longer-term trader one way or the other. I believe that we are paying attention to the idea of stimulus out the United States, and of course the idea of vaccinations in the United Kingdom being so ahead of everyone else. On the other hand, if we get a sudden rush to safety, that might kick off selling here. I do believe that you need to let the market tell you what it wants to do first before getting involved.

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