GBP/USD Price Forecast – British Pound Likely To Consolidate Further

The British pound has initially pulled back a bit during the trading session on Wednesday but then turned around to show signs of life again as Brexit noise continues to dominate the headlines. While there is no formal agreement yet, it does at least look like we are going to be less likely to get a “hard Brexit”, at least on October 31. This is reason enough for the markets to do a lot of short covering, as we have seen a major shift in the likelihood of a final outcome being serviceable. Beyond that, the British pound was essentially priced for the apocalypse, so now that we have gotten past that, most short sellers are on the back heels now.

GBP/USD Video 24.10.19

I do recognize that the 1.30 level will be difficult to overcome though, so keep in mind that a break above that level would of course kick off the next leg higher. This would be crucial and could send this market towards the 1.33 handle based upon historical charts. It could also go as high as 1.35, based upon longer-term charts as well.

On the other side of the equation, if we were to break down below the hammer for the trading session, it could send this market down to the 200-day EMA underneath, which is closer to the 1.27 handle. Either way, this pair is likely to make a significant move sooner or later, but it will almost certainly be driven by some type of headline which of course is difficult to guess ahead of time.

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