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GBP/USD Price Forecast – British pound bounces after selling off drastically

By:
Christopher Lewis
Updated: Oct 25, 2018, 05:07 UTC

The British pound reached down below the 1.29 level before bouncing a bit on Wednesday. The Americans look as if they are going to be a bit more risk driven than the rest of the world, so perhaps we can get some type of technical bounce but clearly there looks to be a lot of resistance above in the short term.

GBP/USD daily chart, October 25, 2018

The British pound fell rather drastically during the trading session again on Wednesday, as we are clearly well below the 1.30 level. This is a market that continues to find plenty of volatility, and of course headlines out there that can move the British pound drastically in both directions. Ultimately, I believe that this is a market that will eventually find its footing, but I think we need some type of stability and not only risk appetite globally, but also for people to quit talking. Quite frankly, every little headline since the algos into overdrive, and then the next thing you know the market is falling apart again. I do believe that eventually we get some type of deal or decision involving the Brexit that will send this market much higher. After all, the one thing that this market is missing is certainty. Because of this, I think that once we get that catalyst, this market will explode to the upside.

Looking at the longer-term charts it’s obvious that there is a previous downtrend line that should offer support, but we haven’t touched it yet, so there could still be some downside to this pair. Quite frankly, this is a great market to lose money in as every time we get a new headline, it rips in one direction or the other. However, small positions being built for a longer-term move higher still remains my favorite trade, but the positions have to be extraordinarily small to write out all of the volatility.

GBP/USD Video 25.10.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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