GBP/USD Price Forecast – British pound choppy on Monday

The British pound has gone back and forth during the trading session on Monday to kick off the week, as we continue to see a lot of trouble overall. I think that the British pound is very likely to continue to see sellers on rallies, reaching down towards the 1.25 level. In general, I think that the US dollar will probably strengthen if Jerome Powell even sounds remotely hawkish after the rate hike.

GBP/USD Video 18.12.18

Rallies at this point will continue to suffer at the 1.27 handle, an area that I think is massive resistance. It daily close above there could be bullish, but I think it’s probably safer to simply fade this market every time we rally and show the first signs of exhaustion. Algorithmic traders continue to push this market around based upon headlines, with places like Twitter causing a lot of issues. I think at this point we will continue to see the British pound reached towards the 1.22 handle, based upon a breakdown of the previous descending triangle. That measurement coincides nicely with a massive area of support on longer-term charts, so having said that it makes a lot of sense to see that move. If the Federal Reserve sounds hawkish after the interest rate hike, it’s likely that we could send this market much lower. Either way, I think that it’s difficult to imagine that the market will have any strength for a longer amount of time until we get some type of Brexit.