The British pound initially fell during trading on Thursday but has turned around to show signs of life again.
By doing so, it looks like the 1.35 level will continue to be important and an area that I think a lot of people will be watching very closely.
With that being the situation, I like the idea of buying dips as long as we can get some type of softening of interest rates. They did soften a bit later in the day, but the question is, can we really get momentum to the downside?
To the upside in the interest rate markets, if we were to break above 4.32, I think that really puts a lot of pressure on the pound. But we're sitting on such massive support anyway and in an area that the markets recognize as previous resistance that I really don't see this as a scenario that should be causing a lot of trouble to the GBP/USD pair.
Geopolitical Factors and Support Levels
With this, I like the upside, but I also know that we need to see good news particularly outside of the Middle East because it will drive interest rates lower in America, and people will probably step away from the dollar. You can see that we've been trying to do it for weeks, but the nonstop confusion out of that part of the world continues to work against any type of actual flowing trend.
Top Regulated Brokers
I don't necessarily like shorting this particular pair. If the US dollar starts to strengthen, then I'll probably short other currencies against it like the New Zealand dollar, maybe the Japanese yen, definitely the Swiss franc. The British pound itself is relatively strong due to a stubbornly tight central bank in London.
Ready to trade the Forex GBP/USD analysis and predictions? Here are the best forex trading platforms UK to choose from.