GBP/USD Price Forecast – British pound flattens

The British pound went back and forth during the trading session on Wednesday, as we continue to hover above the 1.27 handle. The fact that we are hanging out in this area tells me that the market is in somewhat of a “holding pattern.”
Christopher Lewis
GBP/USD daily chart, January 10, 2019

The British pound sits above the 1.27 level still, which is somewhat bullish in the sense that at least we are breaking down. If we do get below that level though, I fully anticipate that this market will probably reach towards 1.25 handle. With the British government struggling to come to an agreement when it comes to the Brexit, I think there is still quite a bit of significant downside risk. However, we are holding steady and therefore some hope has to be taken from that.

GBP/USD Video 10.01.19

If we were to break above the 1.28 level, I think at that point we could start looking towards the 200 day exponential moving average, pictured in black on the chart. However, I do recognize that there are more potentially bad things that are going to happen than good, so I would not be as comfortable taking that position as I would’ve break down below the 1.27 handle. Obviously, a lot of bad news is priced into the British pound already, so I’m not looking for some type of meltdown. Based upon the descending triangle, we should be looking towards the 1.22 handle longer term, but obviously we need to get through the 1.25 level before we can have that conversation. The US dollar has helped the British pound as of late, due mainly to the conversation coming out of Jerome Powell about being a bit more nuanced with the rate hike schedule. We will have to see, but it looks as his most people are starting expect the Fed to slow down so that could alleviate some of the downward pressure.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.