GBP/USD Price Forecast – British pound fails at resistance

The British pound rallied significantly during the trading session on Thursday, testing the 1.27 handle. However, there is a significant amount of resistance at that area, as it had previously been support.
Christopher Lewis
GBP/USD daily chart, December 21, 2018

The British pound rallied a bit during the trading session on Thursday, as we have seen a selloff of the US dollar in reaction to the Federal Reserve comments during Wednesday. Ultimately, this is a market that may have gotten ahead of itself though, because of course we still have all of the issues when it comes to the Brexit. At this point, the market should be offering a selling opportunity, but we will have to see how things play out. If we break above the 50 day EMA, then we could rally significantly at that point, but it’s a bit difficult to imagine that scenario until we get some type of solution with the Brexit.

GBP/USD Video 21.12.18

Even if the US dollar does soften a bit, it’s difficult to express that against the British pound. After all, the British pound has been the whipping boy for some time, and I don’t think that’s going to change until we get some good news. I don’t think we’re going to get a between now and the end of the year, so I look at these rallies as selling opportunities. Ultimately, I think at this point the descending triangle been broken through the bottom still points towards a move to the 1.22 handle underneath.

If the market turns around and break above the red 50 day EMA, then we will probably go looking towards the downtrend line of the triangle, and perhaps the 200 day black EMA on the chart. Either way though, I think that it’s only a matter of time before traders start to focus on the Brexit yet again.

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