GBP/USD Price Forecast – British pound quiet to kick off week

The British pound was a rather quiet to kick off the week on Monday, as we continue to hover above major support. There are a multitude of potential moves waiting to happen, but the most interesting one is to the downside.
Christopher Lewis
GBP/USD daily chart, April 23, 2019

The British pound has been rather quiet which makes a lot of sense considering that the headlines around the Brexit will continue to be very quiet. After all, we got the extension that everybody wanted, so it makes sense that now there will be a bit of reflection and perhaps even exhaustion when it comes to this market. The erratic trading of the British pound has been difficult for most of the people I speak to, and therefore it’s not a huge surprise to imagine a scenario where the market simply doesn’t know what it wants to do.

GBP/USD Video 23.04.19

That being said we are drifting a bit lower. There is obvious support at the 1.2950 level that extends to the 1.30 level, and we are sitting right on top of that. If we can get some kind of break lower rather quickly, it would kick off a perfect descending triangle. At that point, we could very easily, based upon the measurements of that triangle, go back towards the trend line that we broke to begin with. While that’s a short-term negative, that isn’t exactly rare. Quite often you will see one more attempt to break back below the trend line before the market turns in the other direction again.

When you think about the politics surrounding the Brexit, it should not be much of a surprise that we are simply deflating. If we break down, I’m not looking for some type of major selloff, I believe at this point what we are looking at is a simple drift lower to find more support. The alternate scenario of course is that we rally and break through the downtrend line of the descending triangle, which at that point we will probably target 1.3133 again.

Please let us know what you think in the comments below

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