GBP/USD forecast for the week of July 17, 2017, Technical Analysis

The British pound initially fell during the week, but found enough support at the 1.28 handle to turn things around and break out to the upside. The fact that we cleared the 1.3050 level suggests that the British pound is going to continue to find buyers, and now it looks like we will reach towards the 1.3450 level above. I believe that the British pound is going to continue to try to break out to the upside longer term, so short-term pullbacks will be buying opportunities. Longer-term, this is essentially a “buy-and-hold” scenario, as I think that the target is the 1.3450 level above, and then possibly even higher than that. I have no interest in shorting, at least not until we break down below the 1.28 handle, possibly even the 1.26 level after that.

Major breakout

I believe that this is a major breakout, and should have some staying power. That being the case, I think that the British pound is finally turning the corner, and now starting a longer-term uptrend. Ultimately, this market could find itself getting to the 1.40 level by the end of the year, as we will grind back and forth. Again though, if we were to break down below the 1.28 level, I would become concerned. Until then, I think this is a “buy only” scenario going forward and into the end of the year. If the Federal Reserve cannot raise interest rates as quickly as once thought, that will add more fuel to the fire. Also, some type of certainty about the negotiations between Great Britain and the European Union could help this currency as well. I believe that the more serious threat is to the upside, not the down side.

GBP/USD Video 17.7.17