GBP/USD Price Forecast – British pound screams higher

The British pound shot straight up in the air during the trading session on Tuesday, but as you can see we have seen a lot of noise and resistance above. While this is a very positive turn of events for Sterling, the reality is that it’s been a very difficult currency to own as of late. While this does give buyers some hope, there is still a significant amount of noise above. In fact, I had previously suggested that the 1.31 level needs to be broken in order to feel comfortable about going long for a larger position. In the short term, I suspect that the diligent way to trade this market is to wait for signs of exhaustion.

GBP/USD Video 01.05.19

Those signs of exhaustion should give us an opportunity to start pushing towards the 1.29 level, and then back down to the 1.28 level. That is the 100% Fibonacci retracement level from the recent shot from the downtrend line, but one thing that I would point out is that although it’s been a very messy descending triangle, it does in fact suggest that we are going lower. At the 1.13 level though, I’m more than willing to scrap that idea, and realize that we are going to be looking for clarity yet again.

This is a market that is going to be highly driven by the random tweet or political soundbite, so it is going to be very volatile and difficult to own at times. Regardless of which direction you pick, there’s going to be significant danger.

Please let us know what you think in the comments below