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GBP/USD Price Forecast – British pound continues to show weakness

The British pound broke down during the Monday session to kick off the week, as we continue to see a lot of noise out there. By breaking down below the 1.2350 level, then we then drop another 100 pips.
Christopher Lewis
GBP/USD daily chart, July 30, 2019

The British pound broke down significantly during the trading session on Monday to kick off the week as we continue to see a lot of trouble with the Brexit and whatever is going to come out of that. At this point, a “no deal Brexit” is starting to become a reality, and therefore I think we are going to continue to see a lot of weakness when it comes to Sterling. However, I also believe that the market is trying to find a bottom, but it probably won’t get there until this fall.

GBP/USD Video 30.07.19

Keep in mind that the Federal Reserve has a meeting this week, so that could cause a bit of movement in the US dollar. If the Federal Reserve cuts rates, and they should, that could be negative for the dollar, but more importantly it’s going to be all about the statement and the tone of it. If the Federal Reserve sounds overly dovish, that could lead the little bit of support to the British pound, but not much as the Brexit obviously creates a whole plethora of issues.

To the upside, the 1.2350 level should be resistance, and most certainly the 1.25 level will be. Ultimately, I think that fading rallies continues to work, and now I think eventually we will go looking towards 1.20 level underneath. We aren’t going to get there anytime soon though, at least not likely to do so. Take your time, look for rallies that show signs of exhaustion, and then take advantage of those selling opportunities.

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