GBP/USD Price Forecast – British pound testing resistance

The GBP/USD pair has rallied rather significantly during the trading session on Tuesday, testing the structurally important 1.27 handle, an area that has been both support and resistance as of late, and this of course is a relatively strong sign, but quite frankly it’s not on the heels of much in the way of news. Because of this, I suspect it’s more short covering than anything else, as we have the Federal Reserve meeting on Wednesday that can move the US dollar. Because of this, I think that this rally is probably somewhat short-lived, especially if the Federal Reserve seems more hawkish in its statement.

GBP/USD Video 19.12.18

Brexit news continues to be the reason that this market moves overall, and at this point it’s not anywhere near some type of resolution. Because of that, I think that this is at best short covering, and that the downside should be still intact, as we have so many issues when it comes to the cable. Breaking below the bottom of the triangle suggested a move down to the 1.22 handle, and quite frankly there’s nothing on this chart that tells me that still can’t be done. Granted, there’s a little bit of positivity during the day on Tuesday, but I think that will be short-lived. One has to think it’s only a matter of time before somebody says something somewhere against the market selling off yet again. That seems to be the overall theme of cable right now, simply looking for a reason to sell off.