GBP/USD Weekly Price Forecast – Cable Breaks Key Figure After NFP

The British pound has rallied significantly during the week, breaking above the 1.35 handle. Ultimately, this is a market that I think does continue to go higher, especially if we get some type of Brexit deal. Traders are essentially putting money to work ahead of the weekend, assuming that there will be some type of Brexit announcement. It does look more likely than not these days, but if it does not happen, this could set up nothing short of a disaster for this pair.

GBP/USD Video 07.12.20

If we do get a deal that is decent for the British, the market is likely to go looking towards the 1.3750 level. Pullbacks should be buying opportunities, and after this type of week it shows that we are clearly trying to break out, but it does not necessarily mean that we are going to shoot straight up in the air. As long as we do not take out the candlestick from this past week, the market should continue to go higher. I think that the 1.3750 level is an area that a certain amount of profit-taking will happen, but if we get some type of deal eventually, we will go looking towards the 1.40 level after that. If we were to take out the candlestick for this past week though, that could open up a move back down to the black 200 week EMA underneath.

All things being equal, this will continue to be a situation where headlines will be one of the biggest drivers, so I think it is going to be difficult to hang on to the trade unless you keep your position size reasonable.

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