GBP/USD Price Forecast – British Pound Continues To Consolidate

The British pound continued to consolidate during the trading session on Friday, as we dance around the 1.29 handle. At this point, the market is vulnerable to headlines coming out of London.
Christopher Lewis
GBP/USD daily chart, December 02, 2019

The British pound has fallen a bit during the trading session on Friday, chopping back and forth. Ultimately though, this is a market that continues to be driven by Brexit headlines, and as we are waiting for some type of decision when it comes to election headlines, but at this point it looks as if the Tories will continue to be in control, and if they get a majority Parliament, this could send the British pound much higher. In fact, the most recent pattern suggests that we are in fact going higher.

GBP/USD Video 02.12.19

Looking at this market, it should also be noted that the market has been trying to form a bullish flag for quite some time, and it is still very much intact. That being said, the reality is that even though we have seen a bit of chop lately, the market is still holding this pattern quite well, and therefore nothing has truly change. If we can break above the 1.30 level, then the bullish flag kicks off to the upside and perhaps goes looking towards the 1.33 level which is the next major area of resistance on the chart. Beyond that, we would also go looking towards the 1.38 level as it is the measured move from the height of the flag.

Even if we were to break down below the 1.2750 level, it’s very unlikely that the market breaks down permanently, because we are so cheap from a longer-term standpoint when it comes to the British pound. The 1.25 level would be a natural place for people to start paying attention, so at this point I anticipate that we will probably have buyers there as well.

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