GBP/USD Forecast: Sterling Looks Well Supported at the Moment

• The GBP/USD pair continues to be rather stoic on Thursday, as traders continue to sell the US dollar overall.

The British pound has been very noisy during the trading session on Thursday as we have seen a lot of questions asked about the sustainability of the selling of the US dollar. That being said, it is more or less a choppy sideways session and that's not a bad thing, that's actually healthy for the bulls because it shows that we are respecting the idea of staying up here.

The 1.3750 level is an area that I'm pretty sure I have talked about multiple times going back multiple years, and you can see it was an area that offered support during the day. It did the same thing on Wednesday, so as long as we can stay above there, this is consolidation.

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Central Bank Differentiation

This is the British pound working off some of the froth from its recent move to the upside. If we break down below there, then we probably go looking to the 1.36 level. It is still countertrend though, so you have to keep that in mind. I think the US dollar probably remains a little bit soft against the British pound and other currencies, but I also recognize that the market is going to have to perhaps come to terms with the fact that the Federal Reserve may not cut rates as quick as everybody likes.

So, then you look at it from a central bank to central bank kind of methodology. For example, the Bank of England is going to be slow to cut. The Reserve Bank of Australia is going to hike. That's something that's kind of different than many others. And then Canada, the EU both look flat. So, I think you're going to see some real differentiation in the forex world. There will be a couple of winners, I think the Australian dollar and the British pound are two likely candidates, but the US dollar will be strong against others. This is one where I think it leans a little bit towards the opponent, in this case the British pound.

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