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GBP/USD Weekly Price Forecast – British Pound Pulls Back for the Week

Christopher Lewis
·2-min read

The British pound has pulled back significantly during the course of the week, showing the 1.25 level to be very difficult to deal with. Ultimately, I believe that is essentially going to act as a “ceiling” for the market, but at this point the market looks somewhat resilient and of course the previous candlestick on the weekly chart was massively bullish. With that being the case, one would have to think that there are still buyers out there. I think we will see a lot of choppiness over the next couple of weeks, and a serious lack of clarity could be a big problem.

GBP/USD Video 06.04.20

Looking at this chart it’s easy to see that the market has been negative over the last couple of months, but the moving picture continues to be that the market is trying to figure out where it wants to go longer term. Remember, if we do see some type of trend change, it will be a very messy affair. The last couple of candlesticks have been very interesting though, as the British pound gained 7% during the previous week.

The pound is oversold historically, so I do think that there are a certain amount of value hunters out there willing to step in and pick this market up. Furthermore, there are massive amounts of stimulus coming out of the Federal Reserve, so that should in and of itself work against the value of the greenback longer term. Having said that, we need to get past the complete fear factor of the coronavirus before other currencies can truly take off. That being said though, the British pound certainly looks like one of the candidates to do so initially.

This article was originally posted on FX Empire

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