The British pound has rallied initially during trading on Monday, but as you can see has struggled after that. Ultimately though, I do think that there are buyers underneath, but we may need to pull back to retest the 1.3650 level underneath. That is an area that has been extraordinarily resistive in the past, so it makes sense that we could see a lot of support there as it was the scene of a major breakout. In fact, I believe that the closer we get to that level, the more value you are starting to see in the British pound itself.
Longer-term, I think that we are going to go much higher, especially considering that the Bank of England was a bit more hawkish in its statement than expected. A lot of this will come down to risk appetite though, which seems to be taking a bit of a beating as of late. Longer-term, I anticipate that 1.45 will be targeted, but in the short term I think the sellers still run this pair, at least until we can break above the 1.39 level, which would show that the buyers are willing to fight. The 1.40 level after that of course is going to offer resistance as well, but I think that waiting for value in picking up this pair at a lower price is probably going to be the best way to go.
GBP/USD Video 13.02.18
This article was originally posted on FX Empire
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