GBP/USD Price Forecast – The British Pound Continues To Get Knocked Around By Headlines

The British pound has gone back and forth during the trading session on Thursday as we continue to see a lot of volatility in this market based upon the idea of a Brexit deal. With that being the case, the market looks likely to be erratic going forward. One thing you can say though, it’s definitely overbought.
Christopher Lewis
GBP/USD daily chart, October 18, 2019

The British pound has been all over the place during the trading session on Thursday as we reached towards the vital 1.30 level, an area that is a large, round, psychologically significant figure. We got the spike in the British pound due to the headlines that the EU and the UK had reached a workable deal. However, that was quickly smacked right back down by the DUP, as they suggested that there were still plenty of holes in the potential deal.

GBP/USD Video 18.10.19

Looking at the chart, we have formed a bit of a shooting star that was preceded by a hammer, and as a result it makes sense that we would continue to see a lot of noisy trading as it looks conflicted. This pair is definitely overbought, so buying up here on that headline, you got what you deserved. That being the case, a lot of people were underwater and therefore it’s likely that people are probably going to get nervous. That should lead to a nice buying opportunity underneath, as we have obviously change the trend overall, but we need to get a little bit of reality back into this situation. It looks likely that the 200 day EMA could be a buying opportunity as it would be another couple hundred pips given back, and essentially the 50% Fibonacci retracement level from the shot higher. I’ll be paying attention to the 200 day EMA, for signs that we are going to continue the uptrend.

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