GBP/USD forecast for the week of November 30, 2015, Technical Analysis

The GBP/USD pair initially tried to rally during the course of the week, testing the 1.52 level for resistive action. It did in fact find it in that area, and as a result we turned back around and fell all the way back down towards the 1.50 level. The 1.50 level should be supportive based upon the fact that it is a large, round, psychologically significant number, and of course the fact that was previously support and resistance back during the end of last year.

Having said that though, we believe that the shooting star from the previous week was the harbinger of bad news for this market, and now we are simply waiting to break down. A move below the 1.50 level sends this market looking for the 1.45 handle next in our opinion. The US dollar continues to be the strongest currency in the world, and therefore it’s not a surprise if that happens. After all, you have to keep in mind that the Federal Reserve is probably the one central bank rate now that it has to seriously think about raising interest rates, and with that it will make quite a bit of sense to see the US dollar continue to appreciate. On top of that, you have to keep in mind also that the British are highly beholden to what goes on in the European Union as it is their largest market that the deal with, and that of course has a bit of a drag on the British economy itself.

At this point in time, we do not see scenarios in which we are willing to buy this pair, at least not until we break above the top of the shooting star from the previous week, but quite frankly that would not give us much in the way of room to trying to continue to go higher and reach towards the 1.55 handle. If we can break above the 1.55 handle, that of course would be significant but we do not anticipate seeing that anytime soon. We remain bearish, and recognize that most of the market does as well.