GBP/USD Price Forecast – the British pound continues to reach higher

The British pound initially pulled back during the trading session on Thursday, but then found enough momentum to reach to the upside and show signs of strength yet again. This being the case, we are approaching major resistance barriers.
Christopher Lewis
GBP/USD daily chart, January 18, 2019

The British pound initially pulled back during the trading session on Thursday but found enough support to turn around and form a bullish candle. It’s obvious that the British pound is starting to really make headway into the downtrend, as we are approaching the 200 day EMA. Beyond that, there is a downtrend line that has formed right there at the top of the descending triangle, and it now looks as if that’s definitely being threatened. If we were to close above the 200 day EMA, that could change everything.

GBP/USD Video 18.01.19

If we see signs of exhaustion at the 200 day EMA, we may get a pullback, which would not be a huge surprise either based upon the fact that the Brexit is still up in the air, and I think we could get some type of headline to shake the market out again. I think that the British pound is going to be difficult to trade, but if we get a sudden headline, expect a lot of algorithmic traders to push the markets back around and make things very difficult. However, we have most certainly seen volatility, and I think it is going to continue to be so. Ultimately, I think that this pair is one that has a bit of a floor at the 1.27 level, but if we do break that level, then I think the 1.25 level would be the next target. If we do break above the 200 day EMA on a nice close, then I think we could go to the 1.35 handle.

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