GBP/USD Price Forecast – British pound falls to support

The British pound broke down significantly during the trading session on Wednesday but found enough support at the 1.31 level to turn around and rally. I think at this point, the market is likely to continue going higher based upon what the Americans are doing, and the fact that the gap is of course very large suggests that we have a lot of interest in that area.

I think that this pair will continue to fall on a negative headlines coming out of the Brexit, but quite frankly I think that it ends up being a nice buying opportunity most of the time. At that point, the market should then go towards the 1.3250 level again, an area that has been resistance. However, if we break down below the 1.31 and will significantly, then I think we go down to the 1.30 level which is even more supportive. We have broken through the major downtrend line, and quite often you will see the sideways action for a while before the buyers take over.

At this point, I think that the British pound is historically cheap, and a lot of large traders are out there picking it up “on the cheap.” After all, we will eventually get the Brexit and get down to fundamental trading again. The British economy will survive, and the United Kingdom will be around next year. However, it’s likely that the road higher will be very shaky, so keep that in mind. With that in mind, position size should be small when it comes to trading the British pound against any currency.

GBP/USD Video 18.10.18

This article was originally posted on FX Empire

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