GBP/USD Forecast Today 18/04:Vis A Pullback Coming? (Video)

(MENAFN- Daily Forex)

• In the early hours of Thursday, we have seen the British Pound really make a lot of movement against the US Dollar, but it doesn't look like it knows exactly what to do in this area.
• The 1.33 level above offered pretty significant resistance during the Wednesday session, and the pair ended up forming a bit of a shooting star.
• And now, we are trying to determine whether or not negativity is warranted.

Ultimately, I think this is a situation where at the very least we are overbought and we probably need to see whether or not we can either hang out in this area and build up the necessary momentum to break out above the 1.33 level, or do we need to pull back?

A pullback doesn't necessarily mean that we are going to fall apart. We could very well pull back and find buyers at lower levels, but with that being said, the 1.30 level underneath is an area that I think could offer a major floor in the market. Simply put, this is an overbought market that is running out of momentum. Momentum can and will more likely than not return, but the market can only go in one direction for so long before people start to take their gains.

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With that being said, I think you need to understand that market participants have oversold the US dollar and if there's any run to safety here it could derail what we've seen as of late. That being said, if we do break above the 1.33 level, then we start looking for testing the 1.35 level. Nonetheless, I don't like that move, at least not right away. I would prefer to see sideways action before we truly try to extend what has been a remarkable move to the upside.

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