GBP/USD Price Forecast – British Pound Struggling at Recent Highs
The British pound has initially tried to rally during the trading session on Monday but gave back the gains in order to see the 1.37 level offer significant resistance yet again. This is an area that has been resistive over the last couple of weeks, and therefore I think it is worth paying attention to. That being said, this is a market that is likely to continue to project to the upside over the longer term, as the stimulus in America is certainly going to be huge. In fact, I look at this pullback as a potential buying opportunity and would not necessarily be looking to sell the British pound at this point.
GBP/USD Video 26.01.21
Underneath, the 1.35 level should offer plenty of support, based not only upon the fact that it is a large, round, psychologically significant figure but we have also seen it offer support recently in the past anyway. Beyond that, the market is likely to see the 50 day EMA approaching the 1.35 level as another reason to think that perhaps we would see support. In other words, I think that this is going to end up being a “buy on the dips” type of opportunity for those who are willing to take it.
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To the upside, if we can break above the 1.3750 level, then I think it opens up the possibility of a move towards the 1.40 level. That is an area that is important on longer-term charts, so I think the market will certainly pay attention to it. As far as selling is concerned, I do not necessarily have a plan to do so at this point in time.
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