GBP/USD Forecast May 10, 2017, Technical Analysis
The British pound initially tried to rally during the day on Tuesday, but found the 1.2950 level to be a bit too resistive. After that, the market fell to the 1.29 handle word found a bit of support. I still believe that longer-term buyers will come back into push this market higher, but it could be a bit choppy in the meantime. I think if we can break above the highs for the session, that would be a very bullish sign in the market should then go to the 1.30 level above. That level carries a certain amount of psychological importance, as it is a large, round, psychologically important number. If we can break above there, then the market is free to make the larger move that I have been anticipating for some time. Having said that, the last couple of days have been a bit soft, but simply a pullback from the impulsive move over the last week.
Patience will be needed
The market will probably take a certain amount of patience when dealing with it, but quite frankly I have no interest in shorting this market. The British pound has broken out, but there are a lot of moving pieces. After all, the United Kingdom is leaving the European Union, and that looks very likely to continue the volatility in this pair as there are so many headlines that can come out over the next several sessions. Because of this, you will have to be flexible, but I believe that given enough time the longer-term uptrend will resume itself, and drive this pair much higher. Selling isn’t a thought, least not until we break down below the 1.2750 level, which has been important in the past, and should continue to be important now.