GBP/USD Weekly Price Forecast – British pound breaks down

The British pound broke down significantly during the week, slicing through the 1.30 level, showing signs of extreme weakness. This makes sense, because quite frankly there’s no reason to think that the British pound is going to rally while we are still debating what’s going to happen with the Brexit. At this point, the Brexit is delayed, and while that stabilizes the situation, there is no good news to push the pound higher.

GBP/USD Video 29.04.19

Based upon the descending triangle, you can see that we are reaching down towards the 100% Fibonacci retracement level now, as we have broken the 61.8% Fibonacci retracement level. That suggests that we are going to go to the 1.28 handle, but quite frankly the measurement of the descending triangle suggests that we will try that descending line that I have marked on the chart. At this point, I suspect that the sellers will continue to push this market. It’s not until we turn around and break above the 1.31 handle that I would be a buyer, and even then I would only look for a simple return to the consolidation. In general, I do think that the British pound will rally significantly but that’s not until we get some type of conclusion to the Brexit deal and some type of certainty, which of course is what markets desperately want most of the time. In general, I believe that the next few months might be a bit soft for Sterling. The US dollar strength also is working against the market here as well.

Please let us know what you think in the comments below