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Christopher Lewis
GBP/USD Midday chart, October 30, 2018

The British pound has been sold off rather drastically over the last several days, and at this point it looks as if we are testing some type of major support level. The previous downtrend line has been pierced, but the question is whether or not we will stay below there. If we do, that would be an extraordinarily negative sign, and I think that could send this market much lower. However, a bit of a bounce and perhaps even a bit of a saving of the potential trend change once we break down below the downtrend line.

GBP/USD Midday Video 30.10.18

If we do bounce, it’s probably the 1.30 level that will be the “ceiling” in the short term. Ultimately, I think this market will continue to be very difficult to manage, but given enough time, we will need to make a longer-term decision. If we can break down, then I think the 1.25 level would be the next major target. I believe that this market will continue to struggle due to the concerns around the Brexit, but we also have been a bit overdone lately, so it would not surprise me at all to see this market have to turn around and rally, at least in the short term. Anticipate sudden moves, so keep your position size small as the volatility is seemingly unending and not only this pair, but markets overall.

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