GBP/USD Price Forecast – choppy Tuesday trading

The British pound has rallied a bit during the trading session on Tuesday, reaching towards the 1.3425 level, before pulling back towards the 1.3350 level and then bouncing again. The market looks to have plenty of support underneath, with the 1.33 level being a significant area of importance. I think that the market could eventually find buyers to push higher, perhaps reaching towards 1.3450 level again. I also recognize that this pair is somewhat sensitive to risk appetite, and therefore if we can continue to see bullish pressure in the stock markets or even the futures markets, that could continue to drive this market higher as well.

Otherwise, if we break down below the 1.33 level, I think the market could drop to the 1.32 level, as I see it as a significant range of support. Overall, I do think that we will eventually find a bit of a bounce, but in general I think that we will probably be very noisy over the next several days, and therefore I would keep my position size a bit small. The 1.33 level would be a much more interesting level to start buying from, and in the meantime I think that it’s probably best to sit on the sidelines until the market form some type of impulsive move that we can follow. Once it happens, it should be clear as to which direction to trade next.