GBP/USD Weekly Price Forecast – British pound continues to grind lower

The British pound has initially tried to rally during the week, but then turned around as the 1.25 level is far too expensive for the British pound. With all of the Brexit noise, this should hardly be a surprise that we cannot continue to go higher.
Christopher Lewis
GBP/USD weekly chart, July 29, 2019

The British pound has initially tried to take off to the upside, breaking above the 1.25 handle initially but then rolled over to reach towards the bottom of the couple of hammers that preceded this candlestick. Ultimately, I think this is a market that probably goes much lower, based upon all of the noise coming out of the Brexit. Ultimately, I do think that this is a market that will probably try to reach down towards the 1.2250 level underneath, and then the 1.20 level. To the upside, I think the 1.25 level continues to cause a lot of problems for the buyers.

GBP/USD Video 29.07.19

The one bullish scenario here is that the Federal Reserve is very likely to cut rates, so that of course works against the value of the US dollar, at least in theory. I do like the idea of shorting this market on rallies though, as every time we have tried to rise from lower levels the market has struggled. Beyond the 1.25 handle, I also see a lot of noise at the 1.26 level, and even more importantly for the sellers, the 1.2750 level. With that in mind, I do remain consistently bearish, but recognize that we will eventually get some type of resolution to the Brexit, even if that means there is no true resolution. We will get the initial flush lower, and then careers will be made by going long this pair. We need the final capitulation for that to happen though.

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