GBP/USD Weekly Price Forecast – British Pound Awaits Brexit News

The British pound has rallied to break above the 1.35 level during the week but continues to struggle to stay above there as we still do not have a complete breakdown in resolution to the Brexit situation. That being said, it is very likely that we will continue to see a lot of noise to the headlines, which of course will drive sentiment. Unfortunately, there is no way to know whether or not they will actually figure something out, but it does seem as if lately we have seen a little bit more in the way of optimism.

GBP/USD Video 21.12.20

To the upside, the market could go looking towards 1.3750 level, perhaps even as high as 1.40 level but we would need a significant break above the 1.35 level to confirm that, probably due to Brexit news. There is stimulus coming in the United States, so it does help the British pound a bit but at this point in time I think what we are seeing here is a scenario where we continue to be held hostage by the latest headlines and rumors. Comments from “high-level officials” in places like Brussels and London continue to manipulate the market through the press, and that of course is something that I do not see changing anytime soon. With this, I think that we still have several headaches ahead of us, as the market simply has no idea what to do with itself.

Add to all of that the fact that algorithms now read headlines and tweets as a way to play the markets, you have a perfect example of disaster just waiting to happen. Longer-term, I do think that we go higher but there are a lot of headwinds out there.