GBP/USD Forecast June 2, 2017, Technical Analysis

The GBP/USD pair initially fell rather stringently during the session on Thursday, but found enough support near the 1.2825 level to bounce and reach towards the 1.29 handle. That’s an area that should cause quite a bit of resistance due to the large, round, psychologically significant number, but when I look at the chart, I cannot help but notice that we are making a higher low, the question now becomes whether or not we can make a higher high. If we do, then I think the market will continue to try to grind towards the 1.3050 level above. Today is the jobs number in America, and that of course will cause a significant amount of volatility and choppiness, so be very careful with any positions you do put on.
Patient and small sizing
I think that there are 2 things that you need to be: patient and small sized. This is because the market will probably continue to be choppy, but we also have the possibility of a sudden move due to the announcement. This can be best fought against by using small positions as the damage will then be mitigated. The sudden move of the market can cause a lot of pain for the trader, so when going into the jobs number, it’s best to be either flat or light. I do think that if we can break above the 1.3050 level, it signifies the next leg higher, perhaps reaching towards the 1.3450 level. However, the market has a lot of work to do before we can get to that area.
No matter what happens, this market will be very volatile, and therefore stop losses will become paramount in this market. I don’t have any real interest in selling yet, because I believe that the 1.2750 level underneath continues to be a massive “floor” in the market.