GBP/USD Weekly Price Forecast – The British Pound Pulls Back from Major Level

The British pound has been volatile during the week as per usual, but it looks like it may be running out of steam. This is not a huge surprise considering the impulsive candlestick that we had during the previous week, and the fact that the 200 week EMA is sitting at the top of the candlestick. A pullback from here would make some sense, at least in order to offer some type of value the people can take advantage of. This is most certainly an area where we could run into some type of trouble, but I think that the pullback will not fall any further than the 1.2750 level or so.

GBP/USD Video 10.08.20

In fact, that area offers 100 pips worth of resistance, much like the general area that we find ourselves and right now. A pullback to build up the necessary momentum to finally break out makes a lot of sense, as we may have gotten ahead of ourselves. The Federal Reserve continues to print greenbacks as fast as they can, so this all makes sense as it is a “anti-US dollar” move more than anything else.

I would anticipate a little bit of volatility, but I would not be interested in shorting this pair quite yet. I think that it is only a matter of time before the buyers would return and take advantage of the soft US dollar. However, if we were to break down below the 1.2650 level, things could unwind rather drastically. I still favor the upside, but I do recognize we have some work to do ahead of us.

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