GBP/USD forecast for the week of October 30, 2017, Technical Analysis

The British pound tried to rally during the week, testing the 1.3250 level for resistance. We turned around to form a shooting star, which sits on top of an uptrend line. If it is very interesting, because it could give us an insight as to where we go next. I think if we break down below the 1.30 level, it would be extraordinarily negative, perhaps sending markets down to the 1.27 level underneath. Alternately, if we can break above the top of the candle for the week, the market should then go to the 1.3650 level, which has been massively resistive in the past. Ultimately, the market is in a bit of an uptrend in channel, so I think that the buyers are going to be attracted, but I also recognize that there are a lot of concerns when it comes to the British pound.

The market looks likely to continue the slow grind to the upside, but we will always be under the threat of headlines. I think that eventually we could break out to the 1.3650 level, but that is a long-term move. If we broke above there, the market would be free to go much higher, perhaps the 1.45 level above. All things being equal, if we break down below the 1.30 level, the market probably tries to fall to the 1.27 level, and perhaps even lower. After all it is an uptrend line break, and could have the market staying within the lower bounds of pricing. There is going to be a lot of negotiations between Brussels and London, so it’s possible that we get some type of headline news that changes everything but right now it looks as if the Bank of England is likely to raise interest rates, and that should continue to be good for the British pound overall. The stronger than anticipated GDP numbers out of the United States of course puts bearish pressure on this pair, so it might be a situation where this pair breaks down a bit, but the British pound strengthens everywhere else.

GBP/USD Video 30.10.17