GBP/USD forecast for the week of September 25, 2017, Technical Analysis

The British pound rallied a bit during the week, but found quite a bit of resistance near the 1.3650 level above, which is where the gap from the surprise Brexit vote occurred. Because of this, I expect to see a significant amount of resistance, and the fact that we formed a shooting star is not much of a surprise. Brexit should continue to dominate headlines, and I think that we have an area where bearish pressure would more than likely overtake the market with relative ease. Because of this, I think a pullback is coming, and that quite frankly should be healthy. Alternately, if we can break above the 1.3650 level on a daily close, the market will probably continue to go towards the 1.40 level.

Bank of England

The Bank of England should continue to dominate the headlines, as there have been statements coming out of the bank lately suggesting that interest rate hikes are coming. If that’s the case, it’s likely that the pair will eventually go higher, and the impulsivity of the move lately suggests that as well. I think pullbacks will offer longer-term buying opportunities, but in the meantime, we probably need to pull back to build up enough momentum to finally make the massive breakout. This would be a complete turnaround of the overall downtrend that we had seen for some time, and therefore could have the floodgates open for the buyers and we could see another impulsive move higher. Alternately, if we break down below the 1.30 level, the market should continue to go much lower, perhaps reaching towards the 1.20 level after that. Nonetheless, I think you will see a certain amount of volatility, but we are clearly in an area that is going to influence where this market goes next.

GBP/USD Video 25.9.17