GBP/USD Weekly Price Forecast – British pound hovers above major supportThe British pound continues to hover above the vital 1.27 level, as the British Parliament continues to discuss the potential deal that Teresa May has struck with the European Union. If there is “no deal”, that will be extraordinarily negative. Otherwise, if there is some type of agreement, we could see buyers.
The British pound has gone back and forth during the week, forming a rather neutral candle sitting on top of major support at 1.27, the bottom of a descending triangle. Quite frankly, this makes this set up rather interesting, because we can break down below the lows of the week, I think that the British pound will then go looking towards 1.22 handle underneath based upon the size of the descending triangle. It wouldn’t take much imagination to think that perhaps a “no deal Brexit” could send this pair much lower, but quite frankly with the Federal Reserve becoming a bit more dovish lately, it makes things a bit less clear. However, I do think that we will probably continue to see a lot of uncertainty, so expect sudden moves.
GBP/USD Video 10.12.18
Unfortunately, what will probably move this market more than anything else will be algorithmic trading, based upon headlines on places like Twitter. If we do break above the top of the candle stick for the week, we will probably go looking towards the 1.30 level. The descending triangle of course offers major resistance as well but given enough time I think that the sellers will probably prevail. However, you never know what will come of this conversation and Parliament, so be aware that either scenario could play out. Ultimately, this is a market that is winding up to make a strong move, and we should get some clarity in the next few candles.