GBP/USD Forecast August 27, 2015, Technical Analysis

We’ve had an explosive session in the GBP/USD pair during the course of the day on Wednesday, as we slammed into the 1.55 level. The market has been rather positive for quite some time, but as you can see we found so much in the way resistance at the 1.55 level to turn things back around and slice through the 1.55 handle and slam into the uptrend line that has been the very epitome of why this market been going higher lately. Because of this, we are at a very important crossroads right now, and will have to see how this market plays out over the next 24 hours in order to take the next trade.

Quite frankly, if we can break down below the 1.54 level, we would be sellers and aiming for the 1.52 handle. On the other hand, if we get any type of bounce back above the 1.55 handle, we feel that you have to continue to start buying the British pound overall as it should be a continuation of the uptrend. It’s difficult to garner which way the market wants to go longer-term though, because we are at the end of the summertime, and of course there has been such volatility in the world’s stock markets. This of course has people worried about liquidity, and of course what to do when there’s a situation of losses worldwide. Quite often people will run to the US dollar in that particular circumstance.

Ultimately, the next couple of sessions will be crucial and we need to see what happens. You are probably best to wait until you get a daily close on the chart, simply because you can expect a lot of bouncing back and forth. With this, we are waiting to see what happens on the daily candle, but recognize one thing that we can count on is that the markets will be very nervous overall, and that headlines will continue to throw things around wildly. Ultimately, you are probably better off trading a smaller than usual position as well with all of the fear out there.