GBP/USD Weekly Price Forecast – British Pound Continues to Struggle

The British pound rallied initially during the week, breaking above the 1.2650 level before pulling back. The 1.25 level underneath has offered a significant amount of support as we drove down towards there, which makes quite a bit of sense as it is a large, round, psychologically significant figure and an area that has previously been resistance. The fact that we pulled back down there and bounced a bit tells me that this market is not quite ready to make a move. If we were to break down below that level, then it opens up a move down towards the 1.2250 level, where I see a lot of buying pressure as well.

GBP/USD Video 20.07.20

On the other hand, if we can finally break above the 1.2750 level, it opens up a move towards the 1.30 level. That would be massive in its implications, as it could give us an idea as to a complete trend change. I think we continue to see a lot of noise due to the fact that the United Kingdom has a whole slew of problems, not the least of which will be Brexit. After that, you have to pay attention to the Federal Reserve and what it is doing to the US dollar via quantitative easing. I think because of this the pair will eventually grind higher, but quite frankly it is not something that I believe offers as much alpha as a move would in the Euro, or perhaps the New Zealand dollar.

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