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GBP/USD Price Forecast – British pound continues to consolidate

The British pound continue to consolidate during the trading session on Thursday as we simply wait for the next catalyst to move this pair. Going into a three day weekend in New York, we could have quiet trading.
Christopher Lewis
GBP/USD daily chart, August 30, 2019

The British pound has gone back and forth in a rather narrow range during the trading session on Thursday, as we simply hang about the 1.2250 level. We have been consolidating in this “no man’s land” for some time now. When you look at the chart, you can clearly see that the 1.20 level underneath has been massive support while the 1.25 level above has been massive resistance. With that, we are essentially right in the middle.

GBP/USD Video 30.08.19

One thing to pay attention to though is that the 50 day EMA sits just above, and it is starting to come into the picture as resistance again, and it has been somewhat predictive in the past. Remember, the fundamental news around the British pound of course is focused on the Brexit, and that seems to be without a deal and probably will continue to be. With that being the case, it’s very likely that we will eventually get some type of negative news to knock this market down. In the short term, I’m looking to fade this market on rallies they get close to the 50 day EMA or start selling on a break down below the tail of the candle from the Wednesday session. Either way, I do think that we are going to go back down to the 1.20 level. Ultimately, I have no interest in buying the British pound, at least not until we get that last “flush lower” as the world recognizes that the British are leaving the EU without a deal. At that point, then we can start to talk about the trade of a lifetime.

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