GBP/USD Price Forecast – British pound tries to bounce on Tuesday

The British pound has been very noisy during the Tuesday session, bouncing from the psychologically important 1.2750 level, an area that is also structurally important on longer-term charts, a bounce is in so much a surprise as you would think, even in this environment. Because of the Turkish lira getting a slight bounce, it relieved some of the downward pressure on many of the major pairs, but by the time the Americans came to work, it was obvious that the rally was going to fail. At this point, if we can close below the 1.27 level on a daily chart, it’s probably a signal that the next leg lower begins. At that point, I would anticipate that the British pound would go looking for the 1.25 handle below. I don’t have a scenario in which a willing to buy this pair quite yet, because there’s the issue with the Brexit as well. We would need good headlines coming out of the United Kingdom, or perhaps some type of an agreement between the UK and the EU, something that I don’t see happening in the short term.

Beyond that, the US dollar is the strongest currencies in the world, so it’s a bit of a “double whammy” in this market. I continue to sell short-term rallies, and most certainly will sell a break down below the support that we have formed over the last several days.

GBP/USD Video 15.08.18