GBP/USD Weekly Price Forecast – British Pound Slaves Into Resistance

The British pound has rallied significantly during the course of the week, reaching towards the 1.30 level above. That is a large, round, psychologically significant figure and of course that is something that will catch a lot of attention. That being said, if we can break above the 1.30 level, then it is possible that we go looking towards the 1.3250 level, and then the 1.35 handle. On the other hand, if we cannot break above the 1.30 level, then it is likely that we will drop back towards the bottom of the candlestick for the previous week.

GBP/USD Video 21.09.20

If we break down below the 50 week EMA, then it is likely that we go looking towards the 1.25 level, which of course is an area where we have seen a lot of trading previously. Obviously, breaking down below there would be extraordinarily negative. All things being equal, this is a market that has a huge fight ahead of it, which makes sense considering that Brexit is going to be very noisy, and therefore you will get the occasional massive move. In fact, you need to be very cautious with your position size because quite frankly it is difficult to imagine what comes next due to the fact that the occasional headline, rumor, and Tweak can cause massive chaos.

From a longer term perspective, it is a bit difficult to read this chart because it all comes down to the US dollar for the bigger move. At this point in time, it looks likely that the US dollar is trying to find its footing, so that could work against the British pound as well.

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This article was originally posted on FX Empire

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