GBP/USD Price Forecast – British Pound Shows Signs of Stabilization

The British pound has rallied a bit against the US dollar on Wednesday, as we continue to build up a bit of support around the 1.33 handle. I do believe that we are probably ready to bounce, lease for short-term move. This is especially true after the massive candlestick that we put in during the session on Tuesday. Quite frankly, there was a moment during the trading session on Tuesday that I thought the British pound was going to fall apart. At this point, I believe that the market is ready to bounce, now the real question will be whether or not it is ready to change the trend? One thing is for sure, we are in an area that has been important more than once for the British pound.

GBP/USD Video 02.12.21

At this point, I believe there is a significant amount of resistance above the 1.35 handle, and if we were to somehow clear that area, then it would be a confirmation of a trend change for me. On the other hand, if we break down below the lows of the Tuesday session, that would obviously be very difficult. At that point, this pair would probably fall apart and go looking towards 1.30 level, but unfortunately, we have had recent comments from the Federal Reserve Chairman suggesting that inflation might be “not so transitory.” He is about 18 months behind the reality, so the market will more than likely try to front run whatever it is he is babbling about in front of Congress during the session on Wednesday. With this, we could see a reversal for the greenback, Lee short term, and this is a chart that I could give us a bit of a “heads up” as to whether or not that will actually happen.

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