GBP/USD Price Forecast – British pound continues to look vulnerable

The British pound went back and forth during the trading session on Thursday, showing signs of exhaustion near the 1.3050 level again. After forming a shooting star on Wednesday, it’s not a huge surprise that we would struggle here. That being said, it’s very likely that market participants are going to continue to see noisy trading, because quite frankly there are a lot of moving pieces politically when it comes to the Brexit.

GBP/USD Video 03.05.19

That being said, I think that talk of a potential second referendum got ahead of itself, and now it looks like we are going to continue to see pressure from above. The 1.29 level underneath will be an initial target, followed by the 1.28 level based upon the 100% Fibonacci retracement level. If we break through there, then we can fulfill the previous descending triangle that I had been talking about that suggests we could go to the 1.26 level. However, we have violated some principles when it comes to that descending triangle, so I’m not exactly as thrilled about trading that as I could be.

One thing is for sure, I don’t want to buy the British pound until we clear the 1.31 level on at least a daily close, if not better. I believe the US dollar will continue to strengthen due to the Federal Reserve press conference on Wednesday, which didn’t sound as dovish as most of the market had anticipated. Because of this, we have seen massive swings over the last 24 hours.

Please let us know what you think in the comments below