GBP/USD Price Forecast – British pound takes a break

The British pound went back and forth during the day on Thursday, testing the 1.29 level for resistance and finding it. However, we didn’t necessarily selloff that drastically either. At this point, the pair is oversold so most professional traders will be waiting for a bounce to start selling again. Retail traders are notorious for “chasing the trade”, and that’s probably who selling down here. I think that there are plenty of problems with the Brexit though, so that of course will have people paying attention to headlines coming out of London. This will be especially true when it comes to all things Brexit, and perhaps even unity within the Conservative Party in the UK.

Ultimately, I think that this pair probably goes lower but obviously we probably need to catch her breath as we have gotten so oversold. The 1.30 level above will loom large as resistance, so keep that in mind. I think that it is probably only a matter time before traders punished the British pound, but obviously there aren’t that many people left to sell at this point. I believe that we could go looking towards the 1.2750 level over the next several weeks, but if we get some type of deal with the Brexit, or perhaps at least some cohesion within the Conservative Party, that could give this market a boost. I do believe that we are getting close to the end of the British pound weakness, because quite frankly there aren’t that many people left to be short this market. However, nobody wants to catch a falling knife. Selling short-term rallies on signs of exhaustion will probably continue to work.

GBP/USD Video 10.08.18