GBP/USD forecast for the week of November 23, 2015, Technical Analysis

The GBP/USD pair initially tried to rally during the course of the week, but turned back around to form a massive shooting star. The shooting star sits right at the 1.52 level, which of course has been previously supportive. Now it appears that we are ready to go lower, and a break below the bottom of the range for the week should send this market looking towards the 1.50 level next. Below there, the market should then reach down towards the 1.45 region again. The British pound will certainly looks a bit soft at this point in time, and as a result we have no interest whatsoever in buying this pair. This is especially true from a longer-term perspective, as it looks like the trend is definitely rolling back over again.

Even if we broke above the top of the shooting star, we still think that there is a significant amount of resistance near the 1.55 handle. The 1.55 handle has been resistive and supportive in the past, so having said that it would not be surprising at all to see some type of reaction to that level. With that, we would anticipate sellers would step back into this marketplace. On the other hand, we recognize that a move above there would have us starting to look at a potentially bullish market, but until then we don’t really have any interest whatsoever in going long.

The shooting star signifies that the buyers simply could not hang onto the gains, and as a result it looks like the sellers are starting to take over yet again. Keep in mind that even if the British pound strengthens a bit, the reality is that the US dollar is without a doubt the strongest currency in the world at the moment. It appears that the Federal Reserve will have to raise interest rates fairly soon, as the jobs number was so strong last time, so having said that it makes sense that the US dollar strengthened against most currencies, and of course the British pound won’t be any different.