GBP/USD Price Forecast December 26, 2017, Technical Analysis

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The British pound has been very sideways over the last 24 hours, as traders are starting to pay attention to holidays more than currency markets. However, I do see a significant support barrier underneath. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 10:41 PM

The British pound going sideways during the Friday session would not have been a huge surprise, because quite frankly traders are thinking about holidays more than anything else. The 1.3333 handle underneath is massive support though, so I look at pullbacks towards that area as potential value placed that we can take advantage of, and then try to ride the move towards the 1.35 handle. The market should continue to be very noisy, as we negotiate the British leaving the European Union, so of course headlines are going to be an issue. Regardless, when you look at the charts longer-term, it appears that we are trying to break out to the upside anyway, so I think that you should have a “buy the dips” proclivity when it comes to this pair.

However, if we were to break down below the 1.33 handle, I think the market will then go looking towards the 1.31 handle underneath, which should be supportive, as it coincides quite nicely with an uptrend line. A break above the 1.35 level above, that would be a very bullish sign that could send this market much higher, perhaps the 1.3650 level which is crucial. A break above that level then becomes more of a “buy-and-hold” market. I think we have a lot of noise in this pair, and I believe that the British pound is going to be one of the most important markets to follow in 2018. If you can keep your position size small, perhaps pullbacks at this point offer an opportunity to get involved “on the cheap.”