GBP/USD Weekly Price Forecast – Pound Continues Slight Pullback

The British pound has rallied a bit during the trading week to reach towards the 1.39 handle, only to turn around and show signs of weakness. Ultimately, this is a market that has pulled back from an extreme shot to the upside. The 1.42 level caused major resistance, only to see the market reach back towards the 1.3750 level. That is an area that previously had been resistance, so it makes quite a bit of sense that it is now support. That being said, I think that the market is likely to see a lot of noise in this area before a recovery. The support extends all the way down to the 1.35 handle.

GBP/USD Video 12.04.21

The British pound has gotten so far ahead of itself that this pullback should be looked at as a nice opportunity. The market is forming a little bit of a bullish flag, but really at this point I think you are going to continue to see a lot of noisy behavior in general. With that being the case, I like the idea of simply waiting for a much clearer signal to get involved. With that being the case, I will be on the sidelines but especially interested in this market closer to the 1.35 handle as I think that would be enough to get rid of all of that excess froth that had been built up.

Eventually, if we can break out above the 1.42 handle, then it is possible that we have the ability to take off towards 1.45 handle. I do believe that eventually a possibility, but right now we need to build up enough momentum to make that happen.

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This article was originally posted on FX Empire

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