GBP/USD Price Forecast – British pound breaks fresh lows

The British pound fell rather hard during the trading session on Wednesday after initially trying to rally. We have sliced through the 1.29 handle, and it now looks like we are going to go even lower, perhaps even the 1.28 level after that.
Christopher Lewis
GBP/USD daily chart, May 16, 2019

The British pound initially tried to rally during the trading session on Wednesday but fell rather hard. We had broken through the most recent low at the 1.2850 level, and now it looks as if we are going to continue to go lower. The 1.28 handle will be targeted, and perhaps even lower than that. This has been a precipitous fall in the British pound, but at this point it looks very unlikely that we will go much lower than that due to the fact that there is so much in the way of noise. It’s only a matter time before we find buyers based upon value, but at this point it’s very likely that we have some work to do.

GBP/USD Video 16.05.19

If you were going to short the British pound, you should have done it already. This isn’t to say that we can’t continue to go lower, quite frankly I think we will but there will be a lot of noisy moves between here and wherever we end up. We are historically cheap, and I do believe that longer-term traders will be looking for the opportunity to pick up Sterling at these low levels.

I believe at this point this has more to do with the US dollar than the British pound, because the Brexit is on the sidelines. The delay has calmed things significantly, but at this point it looks like we are paying more attention to the US/China situation which has people buying treasuries, meaning they need dollars.

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