GBP/USD Price Forecast – British pound falls hard on Thursday

The British pound has initially tried to rally during the trading session on Thursday but fell back from the 1.3450 level as the US dollar strengthened across the board. I think that the 1.33 level underneath will continue to be very supportive, and therefore I think that the buyers could command based upon value. Ultimately, we will have to see what happens then, but I think that given enough time they should reemerge. If they break down below the 1.33 level, then the market could unwind to the 1.32 level. Ultimately, I would sit on the sidelines and wait for signs that the ability to get long of the market. If we were to turn around and break down below the 1.32 level, the market will probably then go down to the 1.30 level after that.

Market participants continue to be very skittish, and it’s likely that the noise will continue. However, the 1.33 level has been massive in its importance, so it’s very probable that we will see some type of reaction. Longer-term, we are looking around to try to find some type of direction. I believe that the market participants could be looking at the interest rate differential again, and if so that should drive the pair lower. Regardless, some of this is a bit of a knock on reaction from the ECB, so it’s hard to tell at this point whether it will stick.