GBP/USD Price Forecast – British pound bounces for Tuesday session

The British pound rallied a bit during the trading session on Tuesday, as we had reached towards the 1.2925 level during the previous session. We had gotten a bit oversold and looking at longer-term charts I recognize that the support at the 1.30 level is the beginning of a “zone” down to the one point tonight handle. · FX Empire

Christopher Lewis

Updated Tue, Aug 7, 2018, 10:00 PM

The British pound has rallied a bit during the trading session on Tuesday, reaching towards the 1.2975 handle, but then pulled back slightly. I think there is support underneath, and it’s likely that the buyers are trying to make a bit of a stand at this point as we are at the bottom of the complete zone for support, and of course we had been oversold for some time. However, if we break down below the 1.29 level this could unwind drastically, perhaps sending down to the 1.25 handle over the next several weeks. Obviously, Brexit has a certain amount of an effect on this market, but it’s hard to quantify what’s going on there currently, as there could be so many different moving pieces to the news.

Pain attention to the US dollar is probably the easier route when it comes to trading cable, so pay attention to how the USD is doing against other currencies for direction. We had gotten low enough against the Euro and the Aussie dollar that we may start to see a little bit of US dollar weakness due to an overbought scenario. That of course should help this pair as well, not to mention the fact that there is a massive technical level to be found in the general region. With that, I think it’s easier to buy this pair than sell it but think of it more as an investment than anything else.