GBP/USD Forecast October 31, 2017, Technical Analysis

GBP/USD daily chart, October 31, 2017

The British pound rallied during the day on Monday, showing signs of strength yet again. We reached the 1.32 level above, which has a certain amount of psychological importance. However, I think there is much more resistance near the 1.3250 level above, so I think that the market will try to get there given enough time. Pullbacks of this point should be buying opportunities, and I believe that the impulsive move and more impressively, the recapturing of those losses from the previous move, signifies to me that the buyers are certainly starting to flex their muscles again. Ultimately, the market has been consolidating over the last several sessions, essentially between the 1.31 level on the bottom, and the 1.3250 region above.

Once we can break above and free of the 1.3250 level, the market should then go towards the 1.35 handle above. That’s an area that has a lot of psychological importance to it, but at this point I believe that the real resistance is probably closer to the 1.3650 level after that. If we can break above that level, the market then continues to go much higher, perhaps reaching towards the 1.40 level after that. I believe that a break above that level is a very bullish sign, because quite frankly it is where the market gapped lower after the surprise vote to leave the European Union. If we were to wipe all of that out, it’s likely that the uptrend would continue for the longer-term move, and then the GBP/USD pair would suddenly become a “buy-and-hold” market. I recognize that there will be a lot of noise, but given enough time I think the buyers will continue to jump into this market, which is a bit of an outlier when it comes to trading against the US dollar.

Written by FX Empire