GBP/USD Price Forecast – British pound finds support

The British pound pulled back a bit during the trading session on Tuesday only to find buyers underneath. We have a downtrend line just above, and of course the 200 day EMA based upon the black moving average on the chart. If we can break above there, then the trend change will be somewhat complete, and then I think we could go much higher. Overall, I believe that the 1.27 level underneath will be a bit of a “floor” in the market, so if we were to break down below there I think that the market probably will continue to go down to the 1.25 handle after that.

GBP/USD Video 23.01.19

I also believe that if we break above the downtrend line we probably go looking towards the 1.30 level initially, followed by the 1.33 level. The 1.35 level above there is also another target. I do think that the British pound is getting a bit of a reprieve because people think that the Brexit will be delayed, but I think that given enough time we will probably see sellers come back into the market, but we may be talking about months later. If we get some type of Brexit agreement, that’s a completely different story and then I think we continue to go much higher.

Ultimately, I think you can see a lot of volatility in this pair but that makes sense because the algorithmic traders continue to flock towards this market, which of course causes more problems than good, and the occasional Tweet or headline will throw this market into violent spasms as we have seen more than once lately.