GBP/USD Price Forecast – British pound snaps back after initially falling on Friday
The British pound initially fell during the trading session on Friday, reaching towards 1.31 handle before a lot of buyers jump in and push this market rather hard to the upside. From what I see, it’s likely that we have a lot of demand near that handle, and I think it will continue to offer a bit of a “floor” in the market, and therefore I think that the market will probably go looking towards the 1.32 handle initially, and then perhaps even higher than that given enough time. This is a market that should continue to see a lot of volatility, but I certainly think that the biggest problem with trading this market is that you are going to have a lot of noise involving Teresa May and the Conservatives in the United Kingdom, that of course the drama involving the Brexit.
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If we did break down below the 1.31 handle, then I think the market could go down to the 1.30 level after that. That’s an area that of course has a lot of psychological importance attached to it, and I think that it would only a matter of time before buyers would jump in that area as well. However, if we were to turn around and break down below the 1.30 level, then that could be rather catastrophic for the British pound. Overall, I am bullish longer-term but I recognize that we continue to see a lot of noise.