GBP/USD Price Forecast – the British pound rallies again on Monday

The British pound has rallied a bit during the trading session on Monday, reaching above the 50 day EMA again. However, there is a lot out there that will continue to weigh upon the British pound as the Brexit still has a long way to go, and of course we are getting close to a crucial vote in the British Parliament. As long as there is a lot of uncertainty when it comes to the deal that may or may not be struck with the European Union, I think that rallies in the British pound will continue to be faded overall. I think at this point, it’s likely that the volatility will continue, and of course that we will eventually get some type of negative headline that will scare investors.

GBP/USD Video 08.01.19

I think that until we get some type of certainty when it comes to the Brexit, it’s going to be difficult to own the British pound for the long move. I also recognize that there is a lot of resistance in this area, so I will be paying quite a bit of attention to the 1.27 handle. The 1.27 handle being broken to the downside is a signal to start selling, but if we do break above the highs from about a week ago, then we could go looking towards the 200 day EMA above, which is the top of the previous descending triangle. It’s very difficult to imagine that scenario, but algorithmic traders continue to throw this market around based upon Twitter so we will have to wait and see.