GBP/USD Price Forecast – British pound stubbornly supported

The British pound broke down a bit early during the trading session on Tuesday but continues to find stubborn support just below. By doing so, it looks as if the market is going to hang about the 1.25 region, trying to decide whether it’s too expensive or not.
Christopher Lewis
GBP/USD daily chart, September 18, 2019

The British pound dropped initially during the trading session on Tuesday but found enough buyers underneath the turn things around and bounce quite drastically. Because of this, we are still in the same consolidation area which sits just below the psychologically important 1.25 handle. That is an area that has seen a lot of action in the past so it would make sense to see a bit of a pullback from there. Ultimately though, this is a market that is going to get knocked around due to headlines involving the Brexit and quite frankly it’s not until we break above the 200 day EMA that longer-term traders might be a bit more comfortable.

GBP/USD Video 18.09.19

We are currently banging around the 38.2% Fibonacci retracement level. That of course is an area that people pay quite a bit of attention to, so ultimately it’s likely that the market will need to move from this area eventually. In the short term though it looks as if we are going to hang about, perhaps waiting for the Federal Reserve and what it does to decide what the influence of the US dollar will be on this pair. The next 24 hours should produce somewhat of an impulsive candle and should give us an idea as to the next direction of this pair. Between now and the Federal Reserve announcement, it’s very unlikely that this market is going to make a massive move. With that, a certain amount of patience will be needed.

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