GBP/USD Weekly Price Forecast – British pound facing resistance

The British pound rallied a bit during the week, reaching towards the 1.27 level. That’s an area that has been supported in the past, and it now should be resistance going forward. We have tested that area but look as if we are failing again.
Christopher Lewis
GBP/USD weekly chart, December 31, 2018

The British pound has broken through a significant support a couple of candlesticks ago, and it now looks as if it is offering resistance yet again. Because of this, I think that the British pound will probably roll over a little bit, but on the weekly chart you can see that the 1.22 level is highlighted on the chart with the dashed line. This is the measured move from the descending triangle, and it makes sense considering we have so many concerns when it comes to the Brexit. With that, I think that the British pound will continue to struggle, and the breakdown from a couple of candlesticks ago suggests that we are trying to make the next leg lower. Obviously, there are a lot of headlines out there that can whip this market around, but it’s obviously a market that’s easier to fall from here.

GBP/USD Video 31.12.18

The descending triangle I think suggests that we are going to continue to struggle, and although the Federal Reserve has blinked a bit, I think that the Brexit eventually will take firm hold on this pair again, as 2019 will bring in more negotiations between the United Kingdom and the European Union. If there is a “hard Brexit” it’s very likely that the British pound will take the brunt of the downward pressure, and therefore it makes quite a bit of sense that we would continue to hold the uptrend. It’s not until we get some type of negotiation that settled between the UK and the EU that I think the British pound has a chance to gain for a longer-term move.

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