GBP/USD Forecast May 8, 2017, Technical Analysis

The British pound rallied during the day on Friday, and even broke above the 1.2950 level. It now looks as if we are going to try to reach the 1.30 handle above, as this was a significant break out. That of course will be an area that attracts a lot of attention, but quite frankly I think it’s only a matter of time before we get above there as well. Once we do, the market will then go towards the 1.3450 level which was the previous resistance of the previous consolidation area. I continue to buy dips in the British pound, and recognize that even though it has been very volatile over the last couple of days, this is a market that should continue to attract buying pressure as quite frankly, the British economy’s death was announced a bit prematurely.

Support below

I believe that the 1.29 level will offer support, and as I write this it looks as if there was an attempt to break down below it again, but it failed. Since then, we have rallied rather significantly, and the British pound of course is a bit of a “risk on” currency, least against the US dollar or the Japanese yen. With this in mind, it makes sense that with the markets celebrating the jobs number, the British pound will look attractive. Historically it is low, and although there are tough days ahead for the United Kingdom, the reality is that it is the 6th largest economy in the world, and quite frankly that isn’t going to change anytime soon regardless of what happens in the European Union. Buying dips on short-term charts continue to offer value that looks attractive to me. I have no selling plans as I think the uptrend continues.