GBP/USD Weekly Price Forecast – British pound breaks down for the week

The British pound has broken down significantly for the week, testing the 1.25 level underneath. Ultimately, this is an area that should continue to make a lot of noise, but if we were to break down below the 1.25 handle, that would of course be very negative for the British pound as it would accelerate the downside. That being said, this is a market that should continue to be very noisy, and of course be plagued by the Brexit which doesn’t seem to make any sense at any moment in time.

GBP/USD Video 08.07.19

A lot of what you are seeing is the US dollar picked up strength because people are whining about the possibility that the Federal Reserve will cut interest rates. That’s an impossibility, they have already painted themselves into a corner. With that being the case I would be surprised at all to see a bounce but if we get a break down below the 1.2450 level, we could see an acceleration to the downside, perhaps opening up another 250 pips. To the upside, the 1.2750 level is resistance, and the top of an overall consolidation area.

The candle stick is very negative, so I would be very cautious about trying to put money into the upside. This looks like the market throwing a fit, trying to paint the Federal Reserve into a corner yet again. Overall, it will get what it wants, and the US dollar should get sold off. However, we may get a couple handles worth of negativity in the short term. Be very cautious, and keep your position size small.

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