GBP/USD Price Forecast March 19, 2018, Technical Analysis

The British pound initially tried to rally during the trading session but ran into the downtrend line that has been very important. Beyond there, we have the 1.40 level that should also offer resistance, so it’s possible that we may continue to see the market try to come back and build up the necessary momentum to go higher. I think that the market participants continue to look at inflationary expectations out of the United Kingdom as being positive, so that should help the currency eventually. The market breaking above the 1.40 level would free the market to go to the 1.43 handle. There is a lot of noise above there, so it’s not to be the easiest moved.

Alternately, if we were to break down below the 1.38 handle, that could change things materially. The 1.3650 level is the absolute “floor” in the market right now. A breakdown below there effectively kills the uptrend. Short term it looks negative, but there are a couple of areas underneath that should continue to offer buying opportunities. Remember, this pair is slightly risk sensitive, so we need the stock markets to help, rising to get people to start selling the US dollar again. This sudden pullback is due mainly to US economic announcements coming out hotter than anticipated, but at the end of the day I don’t think this changes the longer-term outlook.