GBP/USD Weekly Price Forecast – British Pound Continues Consolidation

The British pound continues to be extraordinarily volatile, going back and forth in a roughly 300 point range. Ultimately, the 1.30 level continues to be very difficult to overcome, and I think that is probably going to be the main theme in this pair going forward. That being said, if we do get some type of deal with Brexit, obviously all bets are off, and we will probably go straight through the ceiling. A daily close above the 1.3050 level would convince me to be a buyer as well, but until then I think we are probably looking at more of a range bound type of scenario.

GBP/USD Video 05.10.20

Furthermore, there is a huge “risk off” element to this, as we continue to see a lot of fear around the world when it comes to global trade, coronavirus, jobs, and of course Brexit which has a particularly keen effect on this pair. The US dollar is typically bought as a safety currency as bonds get purchased, and we may see that from time to time. All things being equal, the 50 week EMA underneath been pierced to the downside and perhaps even closed on a daily chart would be a signal to start selling.

Until one of those two moves happens, you are stuck trading a range bound market so therefore the weekly candlestick chart probably will not do you too much in the way of favors. Short-term trading continues to be the way going forward, and most importantly I would keep my position size relatively small as headlines can pop up out of nowhere and cause chaos.

For a look at all of today’s economic events, check out our economic calendar.