GBP/USD Weekly Price Forecast – the British pound gets pummeled at the end of the week

The British pound initially tried to rally during the week, reaching towards the 1.33 level before pulling back to form a massive shooting star. This was in a negative sign, and I think it shows that we continue to follow the occasional headline as to where to go next. It looks as if the British pound is ready to roll over for a while, as Teresa May has suggested that the Brexit may be without a deal. · FX Empire

Christopher Lewis

Updated Fri, Sep 21, 2018, 11:16 PM

The British pound rallied significantly during the week, but then turned around of form a nasty shooting star. The damage was all done on Friday after Teresa May suggested that there would be a no deal Brexit, which of course causes a lot of fear. She says that there are still a couple of points in the negotiation that the UK and the EU are far apart from a green, and that of course is a very negative thing. I believe that the market will probably try to find some type of stability underneath, and I believe that there is a bit of a “floor” underneath at the 1.2750 level.

Overall, I do think that buying will eventually be the way to go, but we may need to pullback in order to build up the necessary momentum to wipe out the resistance above. If we break above the top of the shooting star, that would be an extraordinarily bullish sign and could send this market to much higher levels. I do believe that the British pound has essentially bottomed, but obviously it’s not quite ready to take off yet, due to a lot of headline risk out there. Algorithmic traders continue to pummel the pound every time something negative happens, but we also turned right back around to go higher.