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

The British pound has gone back and forth during the week, dancing around the 1.2250 level yet again. With that, it makes quite a bit of sense that the market participants continue to see the Brexit as something that is out of control. At this point, I think that every time we rally, you should be looking at it with major suspicion. I believe that the market will probably go down to the 1.20 level, as it is an area that has offered quite a bit of support in the short term and it is a large, round, psychologically significant figure.

GBP/USD Video 02.09.19

One would also have to think that the level will be packed full of stop loss orders, and therefore I think that the market will be itching to break through that level. Ultimately, then we will go looking towards the 100% Fibonacci retracement level, which is closer to the 1.16 handle. Even if we rally from here, I think that the 1.25 level above will be even more resistive and would be an excellent selling opportunity just waiting to happen. With the British almost certainly having a “no deal Brexit” ahead of them, I think we still need a bit of a flush lower to work out the fear of the market. Eventually, things will become cheap enough that value hunters will come back in. We aren’t there yet, but probably will be sometime either in November or December.

Please let us know what you think in the comments below