GBP/USD Weekly Price Forecast – British pound bounces

The British pound initially fell during the week, reaching down towards the 1.25 handle. However, we have turned quite a bit of buying pressure in that area, sending this market closer to the 1.2750 level again. That is an area of resistance, so the question is where do we go next?
Christopher Lewis
GBP/USD weekly chart, June 24, 2019

The British pound initially fell during the week, testing the vital 1.25 handle. However, we bounce significantly to reach towards the 1.2750 level. This is an area that extends to the 1.28 level, and I think should continue to contain the market a bit, due to the fact that the Brexit of course is still an issue. However, with the Federal Reserve going soft we could get the breakout. If we do get a breakout, then we are looking at the possibility of moving towards the 1.30 level.

GBP/USD Video 24.06.19

You could make an argument for the market trying to form a range between 1.25 and 1.33 above, but obviously that would take the most patient of traders to fulfill those moves. Ultimately, we need some type of resolution with the Brexit or at least some type of stability, followed by a lot of bearish and dovish pressure on the US dollar coming out of the Federal Reserve, which is something I think at least could probably be counted on.

The alternate scenario of course is that we break down below the 1.25 handle, and then go looking towards the 1.2250 level. That is an area that would attract a lot of attention but would eventually probably be just a simple stop along the way down to the more crucial 1.20 level. Quite frankly, this is a market that needs to make a significant decision soon, and once it does it will be interesting to see how this plays out.

Please let us know what you think in the comments below

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