Yahoo Finance GBP/USD Weekly Price Forecast – British pound breaks major support
The British pound broke down during the week, slicing through the 1.27 level, an area that has been rather supportive for a while. This is the bottom of a descending triangle, which measures for a move to the 1.22 handle. I do believe that we get down there, mainly because there are a lot of fears of a hard Brexit going forward. I believe ultimately that the fact that Teresa May went to the EU and they basically explained to her they are willing to renegotiate is bad news for the British pound. However, keep in mind that there are a lot of algorithmic traders out there involved in this pair, willing to jump in and out of the market based upon a headline. This causes short-term spikes to the upside, but then again reality sets in and they get faded. I think that is going to continue to be the case between now and March, as we will have a lot of volatility but with a downward slant.
GBP/USD Video 17.12.18
However, if the British to sign some type of Brexit agreement, currently being debated between the British Parliament and Teresa May, then we could see a rally in the Pound. I don’t think we’re going to see that anytime soon, so the odds of a hard Brexit are increasing, and therefore you will continue to see a bearish pressure here as well. On the other side of the Atlantic Ocean, you have the United States which looks rather healthy, so it makes sense that we continue to break down.
This article was originally posted on FX Empire
