The British pound rallied during the trading session on Thursday, in relatively thin trading volume. We are between 2 major holidays, so that of course has a massive influence on how the currency markets will move. By rallying the way we have, it looks as if the buyers are getting ready to get involved, but there may be a bit of hesitation due to the holiday season. I think if we can break above the 1.35 handle, the market should then go to the 1.3650 level. That is a massive barrier that will be difficult to overcome, but when we do it becomes a longer-term “buy-and-hold” situation, which I fully anticipate seeing during 2018.
Until then, anticipate short-term pullbacks as they offer value and of course a bit of a “back and fill” attitude. I think that the market has more than enough support to continue to send the British pound higher, because quite frankly it had been oversold for quite some time. The US dollar itself seems to be getting beaten up against several currencies, so the British pound will be any different. I think that the market will eventually find plenty of reasons to go higher, but the short-term outlook is bullish if nothing else because of the US dollar looking soft in general. I think that the 1.3333 level underneath is massive support, and is not until we break down below the 1.33 handle that I would become concerned, even though there is a major uptrend line even lower than that. Expect choppiness, but bullish pressure.
GBP/USD Video 29.12.17
This article was originally posted on FX Empire
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