GBP/USD Forex Signal 02/11: Pound Bulls Eye Breakout

(MENAFN- Daily Forex) Potential signal:

I am a buyer of the GBP/USD pair on a break above the 1.3450 level, with a stop at 1.3380 and a target of 1.36 above. The British pound continues to attempt to break to the upside, but we have seen a lot of pressure to send it back down.

GBP/USD

The British pound initially tried to rally during the trading session on Friday, as the 1.3450 level continues to be resistance. That being said, this is a market giving up momentum, and that suggests that we could continue to see U.S. dollar strength.

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For what it's worth, this looks a lot like the Australian dollar chart yesterday, so I think there are a lot of moving pieces as to where the U.S. dollar is going to go. The British pound, of course, is representing an economy that is starting to see more inflation, so I think the British pound still remains a little bit of a resilient currency against the greenback, despite the fact that it's so strong.

Charts showing clear levels

All things being equal, if we were to go back and forth, the 1.33 level underneath is support, with the 1.34 level above offering resistance.

Ultimately, though, if we were to break above the top of the candlestick, then I think that opens up more British pound buying. This would probably be an indictment of the U.S. dollar more than anything else. If the dollar really sells off across the board, the resilient British pound should do fairly well.

EURUSD Chart by TradingView

The market has been sideways all year. We approached the middle of the range that we've been in, reached fair value, and pulled back. That's not a huge surprise. Now the question is, can we break through that barrier? If we do, I'm interested in buying at that point for maybe a 150-point move

Breaking down toward 1.33 could offer a buying opportunity. I'd have to assess that when we got down there.

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