GBP/USD Weekly Price Forecast – British pound falls againThe British pound struggled during the week, as we reached down to the next support level. By breaking through the 1.30 level, the next target has been 1.2750 for some time, but we reached that almost immediately.
We have approached a major support level, an area that is supported by a couple of hammers back in June 2017. I suspect there’s probably a bounce coming, because not only do we have those hammers there but we also have the 61.8% Fibonacci retracement level. That will have some technical traders looking to pick up the British pound at this level, but quite frankly I think what we are waiting on is some type of good news to come from either the Conservative Party in the UK or the Brexit deal itself. At this point, I don’t see it coming in the short term, but headlines can always change things.
At this point, I suspect that there is a lot of desperation and people giving up. This is exactly when reversals tend to happen, but you obviously need to start out small. If we break down below the hammers from June 2017, this market probably retraces the entirety of the move, opening up the door down to the 1.20 level. That of course would be a rather drastic move, but it would probably coincide with some type of bad Brexit deal. In general, I anticipate that this will be a very choppy road ahead, but at the longer-term trader needs to keep an eye on the next weekly candle. If it ends up being a hammer or impulsive positive candle, that could be the sign that we are ready to bounce finally. We need some type of news catalyst to make that happen though.