Yahoo Finance GBP/USD Weekly Price Forecast – British pound rallies for the week
The British pound rallied during the week, breaking above the top of the hammer for the previous week. That’s always a good sign, and we reached rather high during the week. However, the Wednesday and Thursday candles were shooting stars, and that gave us a head that perhaps the market was ready to give back some of the gains. That’s exactly what we have done but the Americans look as if the going to pick the ball back up on Friday.
GBP/USD Video 25.02.19
When you look at the longer-term chart, you can see that there is clearly a support and resistance level that we are dealing with right now, and it looks like we are going to reach towards those highs again. The downtrend line of course has offered resistance previously, and during the previous week we had seen it offer support right at the 50% Fibonacci retracement level. This was probably as close to a perfect set up as you are going to see at this point.
I believe that this is a basing pattern that we are looking at, and that breaking above this trendline is the first step in changing the trend to the upside again. Apart from a “no deal Brexit”, it’s hard to imagine more reasons to sell the British pound. At this point, longer-term value hunters are starting to come in and pick up Sterling “on the cheap”, especially considering that the Federal Reserve looks to be a bit loose. Buying the dips continues to work.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
