GBP/USD Forecast: One Way Trade For Now

The Thursday session in the GBP/USD should be fairly interesting. Keep in mind that today we have an interest rate decision coming out of the Bank of England, and that of course can bring a lot of volatility into the market. What I find truly interesting is that sometimes forex markets will give a hint as to what they want to do ahead of time, and I think that’s what we could be seeing now.

Looking at this marketplace, Wednesday was a bit brutal as we sold off rather drastically. However, we turned back around to form a hammer, and as a result, that is a very bullish sign. I think that if we can break above the top of the hammer, the market should then head to the 1.55 level, which was the top of the area that we have outlined. If we can break above there, we feel that the market should then go to the 1.58 level given enough time.

Looking at this market, I think that it is possible that we could sell off, but we need to get below the 1.52 level in order to convince me. After all, the volatility coming out of the Bank of England announcement will possibly make this market fall initially, but as far as I can see, that will probably be value to be found in the British pound.

GBP/USD Forecast: One-way trade, at the moment.

I believe that this is a one-way trade at the moment, and that’s only buying. Given enough time, I think that we can break above the 1.55 level, and then head to the 1.58 level. Above there, the trend has completely changed and I feel that the market will probably go much, much higher. I do like the British pound overall, and I think that eventually it will happen, but keep in mind that there is a lot of volatility to be had between now and then.

Adding to the possible volatility is the fact that the Nonfarm Payroll Numbers come out during the Friday session as well. So because of that, there could be a couple of interesting days ahead.

With that being said, the attached video is our GBP/USD forecast for June 4th.