GBP/USD Price Forecast – British pound looking for support

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Updated: Oct 27, 2018, 06:09 UTC

The British pound traders saw the market fall yet again during the day on Friday, testing the previous downtrend line, an area that needs to hold if there’s any hope of the trend changing to the upside. As this pressure mounts, we will need to make a decision soon, and I think at this point, we will make a major decision than can be traded soon.

The British pound has fallen again during the day on Friday, testing the 1.28 level. Beyond that, we are testing the previous downtrend line, which of course is what is needed for the trend change to truly stick, as breaking above the downtrend line suggests a potential trend change, and these things are typically very noisy. It’s not uncommon to test this downtrend line more than once. Overall, I think at this point we are oversold anyway, so it’s very possible that we will find value hunters in this market.

Ultimately, if we were to break down below the 1.2750 level, then the market will almost undoubtedly to break down significantly. If that happens, the floodgates could open. However, this is a market that is probably a bit dangerous to trade, so pay attention to the daily chart, and wait to see if we turn around and break the highs from the trading session on Friday, because that would be a very bullish sign, and at the very least offers a trading opportunity to the upside. If we do break down below the 1.2750 level, it is probably only a matter of time before we reach down to the 1.25 handle which of course is a large, round, psychologically significant number. Expect a lot of volatility but be cautious and keep your trading size small to protect your account.

GBP/USD Video 29.10.18

About the Author

Christopher Lewisauthor

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.