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GBP/USD Price Forecast – British pound continues to drop

By:
Christopher Lewis
Updated: Jul 19, 2018, 05:15 UTC

With all of the drama and noise around the United Kingdom over the last couple of days, it’s not a huge surprise that the British pound has taken it on the chin. However, as we saw the Americans come to work on Wednesday, the pair was testing a major support level. The 1.30 level has been important more than once, and I think at this point if the British pound is going make some type of stand, it’s here.

GBP/USD daily chart, July 19, 2018

The British pound has fallen again during the day on Wednesday, reaching towards the 1.30 level for major support. I believe at this point; the market probably looks likely to bounce as the 1.30 level is significant support. If we were to break down below the 1.30 level, that would be an extraordinarily negative turn of events, and I think it would break down the British pound significantly. I believe at this point, the market will continue to be difficult to deal with, but clearly if there is an area where we should see a lot of pushback. There has been a significant break down, and at this point it’s easy to suggest that perhaps we are a bit oversold. If that’s the case, a bounce towards the 1.31 level is very likely, where I would expect to see a significant amount of resistance as we had broken down below that level rather rapidly. I see a lot of supply at the 1.31 level, but certainly a short-term bounce would make some sense from these extraordinarily low levels.

If we do break down below the 1.30 level, then it’s likely that we unwind towards the 1.29 level, and then the 1.275 level after that. I’m a short-term buyer, with a bit of concern.

GBP/USD Video 19.07.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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