GBP/USD Weekly Price Forecast – British Pound Has Rough Week

The British pound has broken down significantly against the US dollar during the trading week, pulling back from the 61.8% Fibonacci retracement level. The 1.25 level offers a significant amount of resistance from a psychological standpoint, and of course a structural standpoint as we have seen. At this point, it is very obvious that if we break down below the candlestick from the week that we have just closed out, the market probably drop down to the 1.20 level, and then eventually the 1.1750 level. I like fading rallies at this point, because the British pound is so weak and of course has a lot of extraneous issues going on in the form of the Brexit. After all, we have no idea how this is going to play out but clearly there are a lot of headwinds.

GBP/USD Video 18.05.20

Although the UK economy is starting to open up a little bit, it is not going to be vibrant or as quick to move as in the past. Ultimately, this means that the market is likely to see a lot of downward pressure. The US dollar course will attract attention in the Treasury market, and as a result it suggests that the US dollar should continue to strengthen overall. Rallies are to be faded; we may have to drop down to a shorter-term chart in order to fine-tune your entries. The 1.20 level will offer a significant amount of support, so a bounce from that area probably makes quite a bit of sense as well.