GBP/USD Forecast May 24, 2017, Technical Analysis

The GBP/USD pair was initially soft during the session on Tuesday, but found enough buying pressure underneath the 1.30 level to continue to go higher. We still have a significant amount of resistance at the 1.3050 level though, so it’s not until we break above there that I think the longer-term move can continue. It seems as if the British pound is trying to build up momentum to the upside, but we continue to see trouble just above. There are a lot of moving pieces out there, so having said that it’s likely that the headlines will continue to move this market. Because of this being the case, it’s probably best to ignore headlines and simply trade this market from a technical analysis standpoint. At least at that point, you can filter out some of the noise. Nonetheless, I think that smaller positions are probably necessary, perhaps offering a “buy on the dips” type of situation.
The significance of the 1.3050 level
If we can break above the significant 1.3050 handle, the market then can make its march towards the 1.3450 level above, which was a major resistance barrier on the longer-term chart. The market should continue to be very choppy and beholden to news coming out, so because of that it’s important that you use stops as you always should any way, and of course keep your position size down. As I record this, we are already starting to see the sellers push back. This is an extraordinarily volatile currency, and with that being the case it’s likely that the market could be frustrating. Keep your position size small, and stay alive and what could be a very difficult situation from time to time. I don’t have any interest in selling yet though.
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