GBP/USD Weekly Price Forecast – British Pound Gets Hammered

The British pound has gotten hammered during the week, slicing through the 1.30 level. This is a market that continues to be very noisy, as the Brexit headlines are starting to take over again. In other words, it will be a sudden Tweet, comment, or rumor that moves this market hundreds of pips at a time. Because of this, the most important thing that you should do with this market is to make sure that your position size is relatively small. After all, in this type of environment it is very easy to lose a lot of money. During the previous freak out over the Brexit situation, the British pound destroyed a lot of retail trading accounts.

GBP/USD Video 14.09.20

That being said, we are testing the 50 week EMA, and perhaps even more importantly the 1.2750 level just below. That is an area that should be supportive, and therefore a bounce could be thought of as being feasible. However, the length of the candlestick is something worth paying attention to, as it shows real conviction. I anticipate that the 1.30 level above could cause serious issues, and then therefore could cause a bit of profit-taking. If we can break above the 1.30 level, then it would be a serious sign of strength. However, the 1.35 level above continues to be a major barrier as well. Quite frankly, I think it is going to be very difficult to trade this market, and therefore extreme caution is needed more than anything else. As the market is going to be trading on raw emotion, you need to be very quick with any positions.

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