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GBP/USD Weekly Price Forecast – British pound shows signs of hope

The British pound initially fell during the week yet again, but at this point we have found a significant amount of support at the 1.20 level. This should not be a huge surprise though, because quite frankly there is a lot of attention paid to these huge numbers.
Christopher Lewis
GBP/USD weekly chart, September 09, 2019

The British pound initially fell during the week, but then bounced from the psychologically significant 1.20 level. That is an area that attracts a lot of attention as it is a 1000 pips level. Ultimately, we are probably going to go looking towards the 1.25 level above which should be massive resistance. You can see that it had been supported in the past, and of course 500 PIP levels are rather important for the longer-term trend anyway.

GBP/USD Video 09.09.19

At this point, the market is getting a bit of a reprieve due to the UK Parliament voting for blocking a “no deal Brexit”, but at the end of the day nothing has truly changed. There is no deal to be signed, and the ones that have been offered are very putative. In other words, it’s going to be bad for the British pound longer-term. Most of what we are seeing now is probably going to be short covering more than anything else. By being patient, you can take advantage of the US dollar “going on sale”, as it continues to be the favorite currency by most traders longer-term. US Treasuries of course continue to attract an inflow and as we have a lot of concerns about global growth, that seems to be destined to strengthen it. At this point, it’s very unlikely that we change the trend in the short term, so looking for signs of exhaustion will be an opportunity to start selling again.

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