GBP/USD Forecast: Continuing Higher - 6 December 2019
The British pound has had a strong trading session during the day on Thursday, as we await the jobs figures out of the United States. The jobs number will be a bit of a sideshow in this pair, because we are focusing more on Brexit than anything else when it comes to trading the British pound. Obviously, as the jobs figure comes out at 830 in the morning New York time, it’s likely that there will be a bit of volatility with the greenback. I anticipate that any pullback at this point will be thought of as a buying opportunity in will probably be squashed rather quickly. To the upside, the 1.3150 level begins a certain amount of resistance, but I think that resistance gets overcome pretty quickly.
Underneath, the 1.30 level should continue to offer plenty of support, and I think it will more than likely be an opportunity to pick up quite a bit of support. I would be a bit surprised we break down below the 1.30 level that if we did, I anticipate it would have something to do with the UK elections. As things stand right now, it looks likely that we are going to get a conservative Parliament and therefore it’s likely that Boris Johnson will be able to leave the European Union rather soon. It’s a bit ironic, but at one point any time there was hopes of a referendum vote being called again, the British pound rallied. Now people simply want to see them get done with whatever’s can happen next.
If there’s one thing that markets don’t like it’s going to be uncertainty, and there has been plenty of that for the British economy because of Brexit. We are historically cheap, and I think that will continue to be paid attention to buy traders around the world as dips are thought of as value. Yes, the last couple of days have been rather bullish and almost parabolic, but when you look at the sideways action that we had been in for a couple of months now, quite frankly this isn't much of a surprise. Beyond that, you can look at the flag pattern and recognize that we should probably go looking as high as the 1.38 level given enough time. It’s going to take some time to get there but given enough time we should. I have no interest in selling this pair.
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