GBP/USD Price Forecast – British pound fills gap from week opening

The British pound rallied significantly during the trading session on Tuesday, filling the gap that kicked off the week. The question now is whether or not we can continue to go higher? Even if we do break higher, there is still a major downtrend line that should keep this market negative overall, and of course there are plenty of Brexit headlines out there that could affect what happens with the Sterling. I think at this point the path of least resistance from the longer-term standpoint is most certainly lower, so it makes sense to simply fade rallies when they present themselves with signs of exhaustion.

GBP/USD Video 14.11.18

The US dollar is certainly going to stay strong due to the higher interest rates, and I think at this point it’s likely that we will continue to see a lot of downward pressure occasionally, because quite frankly it only takes some random rumor on Twitter to get the markets excited. I do think that there is a lot of support underneath the 1.27, and it will take several attempts to break down below there, but we very well could if the Brexit situation doesn’t get better for the British. Once that happens, then we could be looking at a move to the 1.22 handle underneath, based upon the measured triangle. Alternately, if we do break above that downtrend line, expect a huge battle at the 1.35 handle, but obviously something will had fundamentally changed in the market if that happens.