GBP/USD Price Forecast – Continues to Struggle With Same Barrier

The markets have been all over the place again on Friday, which should not be a huge surprise. The 1.30 level above continues to be of importance, not only from a psychological standpoint but also from a very structural standpoint. It has previously been supported, and now looks to be resistance. However, if we are to get a daily close above that level, then you start to look at the possibility of a breakout. You could even make an argument for what is known as a “Quasimodo” pattern. It is a reversal pattern somewhat like an inverted head and shoulders.

GBP/USD Video 05.10.20

Nonetheless, this comes down to Brexit and risk appetite overall. It is obvious to me that there are a lot of concerns when it comes to Brexit, so this is going to be a very difficult pair to trade in the short term. We have recently seen the market spike back and forth based upon headlines, which in the end really did not mean that much. We are back to trading the British pound in the same manner that we did a couple of years ago. In other words, you need to be very cautious about your position size but recognize that we are still in a short-term downtrend although there is certainly a decent fight being put up by the pound. I would be a bit cautious and believe that you still are looking for short-term selling opportunities but clearly the pressures building to the upside.

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