GBP/USD Weekly Price Forecast – British pound falls during the week
The British pound has fallen significantly during the week, slicing through the 1.33 level. That’s an area that offered support more than once, as well as resistance. It’s the 38.2% Fibonacci retracement level of the recent march higher, and I think at this point if we break down below the candle for the week, the market is probably going to go down to the 1.30 level, which is substantively the 50% Fibonacci retracement level. Otherwise, if we can break above the top of the candle for the week, that could send this market looking towards 1.3650 level above which has been resistance in the past.
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Overall, I think that it will be interesting to see how this market plays out, but it seems as if it is following the EUR/USD pair, which has been very noisy as well. We still have the negotiations between the United Kingdom and the European Union as well, and that of course will have an influence on where the British pound goes over the next several months. In general, this could become more of a “risk on/risk off” type of trade and paying attention to global markets and headlines could be the easiest way to trade this market. If we can break above the top of the weekly candle, then I think we could go higher, and could lead the way for continuation of the uptrend that started late 2016. If we break below this candle, then I think the uptrend is in serious trouble.