GBP/USD Price Forecast – British pound bounces on Friday

The British pound bounced during the day on Friday, as the 1.30 level continues to find plenty of reasons to attract buyers. This is a market that I think continues to be driven by value, meaning that we occasionally get the negative headline that sends the British pound lower, only to turn things around and have buyers pick up that value as it is historically cheap. Overall, I anticipate that this market will probably continue to be one that favors the upside longer-term, and although we have been very noisy over the last several weeks, we had recently broken down below a major downtrend line and have even retested it already.

It’s quite often that these breakouts are very messy on the way up, and market participants continue to be very vigilant in picking up the British pound every time it falls. I think the 1.30 level has a certain amount of structural and psychological importance, so therefore it would not surprise me at all to see this market continue to rally. I do believe that we have a lot of chopping around the do between now and the overall breakout which is above the 1.3250 level, and I don’t expect that in the short term. However, I also believe that traders are simply looking at this market as one that has been oversold for so long that eventually historical norms will come back into play, with the British pound being much more comfortable at the 1.60 level than it is the 1.30 level that we see now.

GBP/USD Video 22.10.18