GBP/USD Price Forecast January 18, 2018, Technical Analysis

The British pound went back and forth during the trading session on Wednesday, trading against the US dollar in a consolidated move. I think given enough time, we go higher though, and I believe that a break above the 1.3650 level was very important. I believe that we will probably go looking towards the 1.40 level, as it is the next large, round, psychologically significant handle on the chart. I think that the 1.3650 level underneath continues to offer support, so it’s not until we break down below there that I would be concerned about the British pound. A breakdown below there would be rather negative, sending the market down to the 1.35 handle next.

There has been a lot of negativity around the US dollar, and I think that should continue to be a theme in this pair, at least for the near term. At the 1.40 level, we will of course have a significant amount of resistance based upon not only structural resistance, but psychological resistance. I suspect that the volatility will probably pick up, but there is still most certainly a bullish bias when it comes to not only this market, but anything that has a quote price in US dollars.

Longer-term, I anticipate that we will go looking for the 1.50 level, but the attitude of market participants continues to be very short-term thinking, but with a positive spin overall. On dips, look at the markets as offering value, and be willing to take advantage of the market when it offers that type of opportunity.