GBP/USD Price Forecast – the British pound runs into resistance

The British pound continues to be very volatile and choppy, and now that Teresa May has survived a confidence vote in Parliament, we have seen a bit of a relief rally. However, early in the session on Thursday we are already starting to see the market roll over a bit, following the technical pattern of the descending triangle that just broke down. Quite frankly, with the European Union not willing to renegotiate the deal, this now becomes a currency pair that is going to move with headlines involving the British Parliament.

GBP/USD Video 14.12.18

Be cautious with this market, although I certainly think that selling makes the most sense on short-term rallies that show signs of failure. I believe the 1.27 level is massive resistance, as it is previously seen as massive support. Measured in its typical form, the descending triangle suggests that we are going down to the 1.22 handle, which of course has seen important structural significance in the past, so it makes sense that we would continue to see a lot of interest in that area. If we do rally from this point, I’m not interested in buying the British pound until we get a move above the 200 day EMA, and more importantly: some type of agreement between Teresa May and the British Parliament. At this point, the European Union has washed its hands of the entire situation and will almost certainly feel some pain from this as well. A lot of where this pair goes next could be influenced by whether the Federal Reserve sounds hawkish or dovish, which lately has been a bit more dovish so that means we are going lower, but not as drastically as we could.