GBP/USD Price Forecast – British pound continues to consolidate

The British pound rallied a bit during the trading session on Tuesday, after initially rallying a bit. This is a market that has been negative for quite some time, and now I believe we are trying to decide whether or not we are going to go lower or bounce higher looking for trouble.
Christopher Lewis
GBP/USD daily chart, August 07, 2019

The British pound rallied a bit during the trading session on Tuesday but have given back a bit of the gains later in the day. Quite frankly, I think the market is trying to figure out where we are going to go next, as the Brexit continues to cause major issues. Ultimately, I think that a rally from here will probably run into a major amount of resistance just above the 1.2350 level, perhaps extending towards the 1.25 level after that. Beyond that, we also have the 50 day EMA slicing through that level, showing signs of technical resistance.

GBP/USD Video 07.08.19

Looking at the chart, it’s obvious that we have been extraordinarily negative for some time, but at this point I think the market probably needs a short-term bounce, if nothing else to offer value in the greenback at this point. If we were to break down below the 1.20 level underneath, that could send this market down to the 1.15 handle underneath. All things being equal, we have until October 31 before the British leave the European Union, so there is going to be more than enough opportunities to screw up the Brexit, and that of course means that there is much more opportunity for this pair to fall than rally. Beyond that, we also have US dollar strength due to a lot of geopolitical issues, not to mention the global growth situation slowing down as money goes flowing into the treasury markets. I am a seller of rallies.

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