GBP/USD Price forecast for the week of December 4, 2017, Technical Analysis

The British pound initially fell during the week, but as we have seen before, there were plenty of buyers underneath to send the market to the upside. · FX Empire

Christopher Lewis

Updated Fri, Dec 1, 2017, 10:31 PM

The British pound initially fell during the week but continues to find support, as there has been more than enough reason to think that the uptrend line continues to be a reason for buyers to get involved. I quite frankly think that the British pound has been trying to build up enough momentum to break the longer-term downtrend, and at the 1.3650 level I feel that there is reason enough to think that the longer-term downtrend is over. We have seen a remarkable move since the beginning of the year at the 1.20 level, and the trendline has held true. Obviously, there has been a lot of volatility but for those who have been able to buy a position in hold on to it during 2017 have been quite handily rewarded.

On a move above the 1.3650 level, I think that the British pound then goes looking for the next obvious round number, the 1.40 level. However, at that point I think it is more of a “buy-and-hold” scenario, and therefore I would not only be a buyer, but I would just simply hang onto a trading position. If we were to break down below the uptrend line underneath, then I think we could reach the 1.30 level, but at this point I believe that the buyers are very much in control, and that will continue to be the case as far as I can see. If the US Congress can’t get a decent tax bill passed, that will only exacerbate the US dollar losing value against other currencies, especially the British pound which is finding itself suddenly bullish.