GBP/USD forecast for the week of July 31, 2017, Technical Analysis

The British pound rallied during the week, as the 1.30 level has offered support. The market is currently in the middle of the consolidation area that extends to the 1.35 handle though, so I think that we are going to continue to see buying pressure, albeit choppy. The Federal Reserve has come out as being a bit more dovish than originally thought, and that of course has worked against the value US dollar in general. Because of this, I believe that the market continues to be one you can buy on dips, but it’s probably easier to trade off short-term charts as the longer-term charts don’t have that much room to move. The British pound continues to show signs of life, but quite frankly the US dollar is only going to help.

Buying dips

I continue to buy dips in this market, but recognize that it might be easier to do off of this short-term charts. I think that the market continues to be an opportunity for longer-term traders though, but you should probably slowly build up your position as the volatility is going to be extreme to say the least. Given enough time, I believe that we will go hunting the 1.3450 level above, and I believe that the gap that sits just above that area from the middle of last year’s going to be the next major hurdle for the market to clear. Of course, there are a lot of headlines coming out due to the exit negotiations from the European Union, and that will course cause quite a bit of volatility.

GBP/USD Video 31.7.17