GBP/USD Price Forecast – British pound rallied slightly

The British pound rallied slightly during the trading session on Wednesday, but it’s still going to be soft overall and I think that the headlines of the Brexit are a long way from instilling a lot of confidence. Because of this, I suspect that the market will continue to be watching the drama unfold in London and watching for headlines coming out of Brussels. Right now, it looks as if the 1.27 level underneath is massive support, but I think if we break down below there it could kick off the next technical signal.

GBP/USD Video 22.11.18

If we do break below the 1.27 level then I simply extrapolate the measurement of the triangle, meaning that we should go 500 pips to the downside or down to the 1.22 level. That’s an area that has shown important in the past, and I think that will be a nice longer-term target. Above the triangle currently we have the 200 day moving average, which is hugging the top of the triangle quite nicely. Quite frankly, there’s nothing on this chart that tells me that we should start looking for a buying opportunity. Obviously, if a headline comes out about some type of agreement, that could be good for the pound but we seem like we are a long way from that happening. Ultimately, I think we are further to go to the downside not only because of the Brexit, but also because the Federal Reserve is looking to raise interest rates.