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GBP/USD Price forecast for the week of January 22, 2018, Technical Analysis

Christopher Lewis
Updated
The British pound has rallied again during the week, and it looks very healthy. Now that we have cleared the massive gap a couple of weeks ago, the market should continue to find plenty of buyers. However, markets don’t go in one direction forever, so volatility should be expected.

The British pound should continue to go higher longer term, but in the meantime, it looks as if the bullish candle suggests that we are starting to reach the top of what I could draw out as an uptrend channel. Because of this, I would not be surprised at all to see a pullback but that should be thought of as a buying opportunity. The 1.3650 level has previously been resistive, and it should now be supportive. If not, then we should find support underneath had the significant uptrend line underneath.

I anticipate that the US dollar weakness will continue, and that should continue to be one of the major drivers for this market to continue higher. I look at dips as potential buying opportunities, and therefore I think that the patient traders out there that look for short-term pullbacks will continue to make a significant amount of money. At this point, I anticipate that the 1.40 level could offer a bit of resistance, but I think that it’s an area that will be minor when we look back, and most of the resistance will be due to the psychological aspect of the number more than anything else. I don’t see anything stopping the British pound from going higher over the longer term, so I suspect that pullbacks are opportunities to pick up value, and therefore I think that adding on dips to a core position will be a career making trade for some of you.

GBP/USD Video 22.01.18

This article was originally posted on FX Empire

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