GBP/USD Price Forecast March 27, 2018, Technical Analysis

The British pound rallied a bit during the trading session on Monday, reaching towards the 1.42 level. At this point, I think that if we do get pullbacks they will only end up being buying opportunities. The 1.43 level above should be an area of significant resistance, so I think that the it’s only a matter of time before the sellers would return. That’s not to say that I think we won’t be able to break above there, just that we are getting a bit extended, and if we get there too quickly, that will only be worse.

With the market participants being so bullish, I believe that the momentum will eventually carry us higher. That doesn’t mean that is going to be easy to do so, just that I think that the markets will eventually find a reason to go higher. I think that the 1.40 level underneath is going to be a significant “floor” in the market, with the 50-day exponential moving average sitting just below there. I like buying dips, they offer a buying opportunity in what looks to be a very strong uptrend and represent nice value.

If we were to break down below the 50-day exponential moving average, then we would probably test the previous downtrend line that should also be supportive, and at that point I think I would be a bit concerned. If we break above the 1.43 handle, at that point I expect the market to go looking towards the next psychologically important level, the 1.45 handle.