GBP/USD Price Forecast – British pound rallies into resistance

The British pound rallied a bit during the trading session on Thursday, right into the previous consolidation area. However, we have pulled back just a little bit from that area, and I believe at this point we will probably see sellers come back into this market. With that, we should continue to see the US dollar favored over the British pound longer-term anyway, because quite frankly the Brexit continues to be a huge mess, and there is no confidence nor is there any clarity when it comes to that.

GBP/USD Video 16.08.19

Ultimately, the 1.22 level above is going to continue to cause issues, as it was the top of the previous consolidation area. With that being the case it’s very likely that what we are going to see is sellers come in at the top of that pink box on the chart anyway. If we did break above the 1.22 handle, then the next major resistance barrier is closer to the 1.2350 level. It features the 50 day EMA as well, so that’s plenty of selling pressure just waiting to happen. Ultimately though, I don’t think we get anywhere near that.

You should also know that bonds are being bought hand over fist in general, and that of course requires the host currency of the government bond being sold. Currently, US bonds are on fire, and therefore a lot of US dollar demand is out there. With that in mind I think it makes sense that we revisit the 1.20 level underneath. I also believe that we are going to break down below there as well.

Please let us know what you think in the comments below