GBP/USD Forecast May 9, 2017, Technical Analysis

The British pound had a volatile session on Monday, as we chopped around above the 1.2950 level initially, and then broke lower. Because of this, I believe that the market is probably going to pull back towards the 1.29 handle, where it should find a significant amount of support. And move below there will then almost undoubtedly go looking for the 1.2850 level, but in the meantime, I think that the likelihood of a serious selloff is still slim. If we can break back above the 1.2950 level, then I feel that the market will probably make yet another attempt towards the 1.30 level longer term.
Pullbacks offering buying opportunities?
I believe that you have to look at pullbacks as potential buying opportunities, but the question then becomes where exactly do we find a significant support? That is going to be a difficult question, but given enough time I don’t see any reason why the market doesn’t find buying pressure underneath. The question then becomes whether or not you can hang on to the volatility or if you have a long enough time horizon to take advantage of this move. In the meantime, it does look a little bit soft, but ultimately I believe that is more or less a shorter-term phenomenon, and not something that we are going to see play out over the longer term. The British pound has been bullish as of late, and the volatility has done very little to dissuade the longer-term trader from what I can see. If we can break above the 1.30 level, then we go to my longer-term target of the 1.3450 level over the next several weeks. Either way, hang on to your hat, this could be a rather bumpy ride in either direction.
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