GBP/USD Forecast: GBP Showing Signs of Life Again - 15 January 2020

Christopher Lewis
Christopher Lewis
on January 15, 2020 | Updated On Jan 15, 2020

The British pound rallied after initially falling during the trading session on Tuesday, as we continue to see a lot of life pumped into Sterling regardless. That being the case, it’s very likely that we will continue to see upward momentum, as the 1.30 level has offered a psychologically important figure, as well as the top of the previous bullish flag that kicked off the most recent rally to begin with.

That being the case, the market is also paying attention to the 50 day EMA which is right here in this area, and it looks very likely that the market is going to continue to consolidate in this area, perhaps trying to build a bit of a triangle. A triangle of course could be a sign that the market is trying to build up enough momentum to finally make a bigger move. The 1.35 level above is considered to be a bit of a “ceiling”, but I also think that based upon the flag that had been produced previously measuring to the 1.38 level is something that should be paid attention to as well. Longer-term, I think that the British pound is still considered to be “cheap” and therefore that’s how this pair will trade. Yes, the Bank of England is likely to continue to be dovish, but that is a “known known.”

This doesn’t mean that the market is going to be able to go straight up in the air without some type of volatility, far from it. In fact, I think that short-term pullbacks will continue to offer a bit of a buying opportunity, although I do recognize there is a minor gap above. Once that gets broken through, I suspect that there are people willing to jump in at that point as well, as it would show an impulsive move to the upside. To the downside, it appears that the bullish flag that had previously been such a huge factor on this chart will offer support, meaning that the support extends all the way down to the 1.28 level underneath. The British pound continues to recover after the Brexit vote, as we stay the course to getting out of the European Union going forward. The more that the market sees as a unified British government, the more likely this pair is to continue going higher. Furthermore, the US dollar is softening a bit against several other currencies as well, having a bit of a “knock on effect” over here.

gbpusd

Best Brokers 5 Brokers
More »
DailyForex Trader's Corner DailyForex Trader's Corner
Forex Trading Courses

Want to get in-depth lessons and instructional videos from Forex trading experts? Register for free at FX Academy, the first online interactive trading academy that offers courses on Technical Analysis, Trading Basics, Risk Management and more prepared exclusively by professional Forex traders.

Register Now For Free!
About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Currency Pairs:
Comments

Did you have a good experience with this broker? A bad one? Tell our team and traders worldwide about your experience in our User Reviews tab. Your email address will not be posted.

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.