GBP/USD Price Forecast January 22, 2018, Technical Analysis

The British pound initially rally during the day on Friday, but found the 1.3950 level to offer a significant amount of resistance. I believe that the market will continue to have an upward bias, but we may need to pull back occasionally to build up the necessary momentum to reach and more importantly, break above the 1.40 level. That of course would be a major breakout, and could send this market much higher. The GBP/USD pair continues to benefit from not only in oversold condition historically for the British pound, but also the US dollar falling overall as well. It’s a bit of a “perfect storm”, if you will.

I believe in buying dips, and I look at these pullbacks as an opportunity to add to a core position, if you already have one. I look at this market is one that has been on sale for some time, and I believe that now that we have broken above the 1.3650 level, the market is ready to go much higher, with the 1.40 level being the next obvious target. Above there, the market should then go towards the 1.45 level next, and that of course the 1.50 level. The British pound has been sold off rather aggressively after the vote to leave the European Union, but now it appears that value hunters have come in as it isn’t necessarily going to be the end of the world. I believe that we are in a longer-term uptrend, so that of course skews the bias.

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