GBP/USD Weekly Price Forecast – British pound continues to struggle with resistanceThe British pound has rallied during the week only to turn around of form a shooting star again. The question now is whether or not we break down? I think this shows just how precarious we find this pair right now, and that a significant move is eminent.
The British pound rallied during the week but turned around of form a shooting star again. This is a negative turn of events, but the 1.30 level underneath and of course the previous downtrend line is ever present. It is because of this that I am not ready to start shorting quite yet. However, if we get a daily close below the 1.30 level, then the market probably unwinds towards the 1.2750 level after that. Alternately, if we break above the wicks of the couple of candles on the chart, that would be an extraordinarily explosive sign of bullish pressure.
We are approaching the end of the Brexit drama when it comes to the British pound, and in this scenario I would anticipate a lot of volatility. It is because of this that the longer-term trader probably starts to think about value more than anything else. They also shouldn’t be putting a lot of their account at risk in this pair. However, if we do break out to the upside it is the beginning of a major “buy-and-hold” scenario. This could be a potential trend change, and if that’s the case it could last several years. I suspect that the British pound is historically cheap and a lot of longer-term traders are starting to look at it as such, and that is the major hope I have for this pair. However, I recognize that a break down below the 1.30 level is a clear signal as well.