GBP/USD Price Forecast – British pound gaps to kick off week against greenback

The British pound gapped lower to kick off the week against the greenback, but by the time the Americans came on board had fill that gap it looks likely to continue to try to go towards the recent highs.
Christopher Lewis
GBP/USD daily chart, October 16, 2018

The British pound has gapped lower to kick off the week, but found buyers immediately, and has filled that gap by the time New York started trading. At this point, the uptrend is very much intact, and I think that we will make another attempt to reach towards the 1.3250 level above. If we can break that level, then it will send this market much higher. I believe that we are currently looking at the market trying to recover any losses, and I think we are also starting to see larger traders come in and trying to build a large position based upon a longer-term move. After all, once we get some certainty from the Brexit, I suspect that a lot of negativity will be worked away from the British pound, and we could see the eventual break out.

All one needs to do is look at the longer-term charts and realize how cheap we are at historically. Overall, I like the idea of the market going higher for the longer-term move and building a huge position. Obviously, you would need to do so very carefully right now, as there is a lot of volatility in headline risk out there. I think given enough time, we will see this market reach towards the 1.40 level, but it may take some time to get there. The 1.30 level right now looks very supportive, so I don’t think we will break down below there unless some type of absolute disaster scenario plays out.

GBP/USD Video 16.10.18

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