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GBP/USD Price Forecast – British pound continues to stay volatile

By:
Christopher Lewis
Updated: Feb 13, 2019, 19:01 UTC

The British pound pulled back a bit after rallying quite significantly during the day on Wednesday. By doing so, the market looks as if it isn’t quite ready to go higher, but I also recognize that there is a massive amount of support underneath.

GBP/USD daily chart, February 14, 2019

The British pound initially rallied quite significantly during the trading session on Wednesday but pulled back as we approached the 1.30 level. Ultimately, there is a previous downtrend line that should offer support, and it’s likely that the buyers will come back given enough time. I would expect a lot of volatility, mainly because of the Brexit. With the Brexit headlines out there moving things around, there is a certain amount of uncertainty when it comes to the British pound, but I do think given enough time we will find plenty of buyers.

GBP/USD Video 14.02.19

If we do break down from here, I believe that the 1.27 level should be massive support, just as I think the 1.33 level above will be massively resistive. Given enough time, I think that we will eventually break out to the upside, but we obviously need some type of resolution to this mess when it comes to the Brexit for a longer-term drive. Until then, I think that short-term dips continues offer value that traders will be willing to take advantage of. I think the people are starting to build large core position, in a bid to build up a longer-term trade.

I think given enough time, we will probably reach towards the 1.35 handle, but that obviously is a long way away. I think you should keep your position size small, and then only add when it works out in your favor. This is one of those situations that could make a career, if you are cautious and intelligent about it.

Please let us know what you think in the comments below

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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