GBP/USD Weekly Price Forecast – British pound looks soft yet again

The British pound has broken down significantly during the trading sessions that make up the previous week. We had initially tested the bottom of a hammer from the previous week, and then this week broke down below there. At this point the 1.20 level looks very likely to be a target, as it is a large, round, psychologically significant figure. All things being equal, I think that short-term rallies are probably to be sold in this market, as the British pound still has a lot of issues due to the fact that the Brexit is still up in the air. That being said, we probably have a career making trade waiting to happen here, but it’s going to be a while before that happens.

GBP/USD Video 05.08.19

All things being equal though, the 1.15 level underneath would be the next support level. Ultimately, if we did turn around and break above the 1.25 handle, then it’s likely that we could turn things around but it’s very unlikely to happen. The downtrend is strong for a reason, and nothing has changed to that aspect. Even if the Federal Reserve starts cutting rates, the uncertainty of course is still the major factor in this market, as the Brexit will cause problems and of course will trade is on the forefront of trader’s minds out there. Ultimately, I think we continue to see the US dollar strengthen overall, and that will be especially true against the British pound in general.

Please let us know what you think in the comments below