GBP/USD Weekly Price Forecast – British Pound Falls Toward Support
The British pound has broken down significantly during the week, reaching towards the 1.29 level, an area that did cause a little bit of a recovery. That being said though, most of the recovery was due to traders going home for the weekend so I would not read too much into that slight bounce. Furthermore though, it’s worth noting that there was a bullish flag that we are now sitting on top of, so it should offer plenty of support. Furthermore, there are huge number of headlines coming out from the UK/EU negotiations, so therefore that will cause quite a bit of volatility. Ultimately though, this is a market that is probably going to go looking for some type of support just below.
GBP/USD Video 10.02.20
That being said, if the market was to break down below the 50 week EMA, then the British pound should continue to go much lower. At this point, the candlestick looks very ugly, and it should be noted that four of the last five previous candlesticks were shooting stars. That suggests to me there is still a lot of selling pressure so it will be very cautious as far as buying the British pound is concerned in the short term. Long-term though, the British pound should offer plenty of value. Alternately, if we were to break above the highest from the week that is closing, then it’s likely we can make that move towards 1.35. However, we need some type of good news coming out of the Brexit negotiations.
Please let us know what you think in the comments below