GBP/USD Price Forecast – British pound tries to rally but fails

The British pound try to rally during the day on Friday, but continues to find resistance near the 1.27 level, an area that has been supported in the past, and should now be resistance. After forming that brutal candlestick on Wednesday, the market has struggled to break above there. Ultimately, I think it makes sense as it has been resistance more than once, and it is the bottom of the overall descending triangle that had been such a huge part of the market previously. Now that we have retested that area for resistance and so far it looks as if it is going to hold, I think the sellers will become a little bit more aggressive.

GBP/USD Video 07.01.19

If you look at the descending triangle, it suggested that we would move down to the 1.22 handle, so I think ultimately what we are looking at is a scenario that rallies will continue to be sold off, as there are a lot of concerns about the Brexit currently. Quite frankly, nothing looks better over there so it’s likely that we will continue to see overall British pound weakness. Obviously though, if we turn around and break above the 50 day EMA, that would be a very bullish sign. At that point, I would anticipate that the market would move to the 200 day EMA, pictured in black. However, I suspect that scenario has about a 10% chance of happening right now, and would need some type of headline crossing the wires about the Brexit that is positive.