GBP/USD Price Forecast – British pound continues to chop

The British pound continues the chop around as we are starting to see a bit of resiliency on the part of Sterling. For me, this is a market that continues to be driven by headlines, so it is difficult to deal with. However, fears of a new election in the United Kingdom have subsided, and perhaps that might give us reason to rally. · FX Empire

Christopher Lewis

Updated Tue, Sep 25, 2018, 10:44 PM

The British pound continues to get knocked around due to headlines involving the Brexit, and of course the other side of the equation, the US dollar has a lot to say about where we are going next as well. After all, the world’s reserve currency is very active when we have so many conflicting headlines at the moment. Ultimately, I believe that this pair will continue to see a bid as we get close to the end of the Brexit negotiating process. I think that the 1.31 level is starting off or a short-term floor, but it’s not necessarily a significant long-term floor. I think short-term pullbacks offer buying opportunities that a lot of traders will be looking for, and therefore be willing to take advantage of. In that scenario, I believe that we will probably find plenty of value opportunities for the longer-term trader, as the worst case scenario wizard initially priced in on the boat to leave the European Union.

I also believe that it is only a matter time before the European Union finds itself needing to negotiate with a little bit better attitude revolving around the British, and that the charade that we have seen as of late should continue for just a bit longer before people begin to realize just how destructive this divorce could be. Ultimately, I believe that this is a market that should show plenty of upward proclivity over the longer-term as we are so historically cheap. In the meantime, look at the 1.33 level as a potential target.