GBP/USD Price Forecast February 1, 2018, Technical Analysis

The British pound has rallied significantly during the trading session on Wednesday, as we bounced around to show signs of support and momentum. I think that if we can break above the 1.42 level, the market should continue to go much higher, towards the 1.43 level after that. Longer-term, the market is very likely to go to the 1.45 handle above, as it is a large, round, psychologically significant target. I like the idea of buying dips as it offers value in the British pound which has been oversold for some time, and likely to continue to see a lot of interest in this market, as the reported death of the United Kingdom was greatly exaggerated.

At this point, I like buying dips until we break down below the 1.39 handle. That is the bottom of the range of support that starts at the 1.40 level, and I think that level will be crucial. If we did breakdown below there, the market would break down significantly in my estimation and it could kill the uptrend. I believe that this area is very likely to find a lot of interest, and I believe that longer-term participants are looking at these pullbacks as not only value, but the US dollar showing signs of an opportunity to short again. The US dollar continues to struggle, and I think the British pound is going to be just one of the possible confluence to take advantage of that.

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