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GBP/USD Price Forecast – British pound gaps higher to kick off week

Christopher Lewis

The British pound gapped higher to kick off the week during the session on Monday, but then pulled back to fill that gap before taking off again. That’s a very strong sign, so it’s very likely that we will continue to try to go higher. I think there is a lot of noise just above though, especially near the 1.2975 area that extends to the 1.30 level. That being said, I would expect a lot of noise in this pair which you should see during the Brexit negotiation, which of course continues to drone on and on.

GBP/USD Video 19.02.19

However, I think there is plenty of support underneath, especially near the 1.28 handle which of course is the 50% Fibonacci retracement level and of course the area that coincides nicely with the previous downtrend line. With that being the case, I do expect see a lot of buying pressure underneath and I do think it’s only a matter time before the British pound attract more attention. This not to say that it’s good to be easy, but I do think that we eventually grind higher.

Even if we did break down below the 1.28 handle significantly, I believe that the 1.27 level is even more supportive, and should continue to attract a lot of attention as well. After all, that’s an area that has been important more than once that it is the 61.8% Fibonacci retracement level also. This should continue to function as a “floor” in the market. I believe in buying dips when it comes to Cable.

Please let us know what you think in the comments below

This article was originally posted on FX Empire