GBP/USD Forecast June 20, 2017, Technical Analysis

The British pound initially trying to rally during the day on Monday but found enough resistance to the 1.28 level to turn around and fall. However, I think that the 1.27 level underneath is going to offer a significant amount of support, and the 1.2750 level is the top of that basic zone. I’m looking for an opportunity to go long, but I do not see a bounce yet so I’m waiting for some type of impulsive move. Once we get that move, and break above the 1.28 level, I think the market then goes to the 1.2950 level above, and then eventually the 1.3050 level after that.
Volatility and headlines
I believe that volatility will continue to be very difficult, mainly because of the headlines coming out of both London and Brussels during the negotiations of the United Kingdom leaving the European Union. Because of this, I think that smaller position sizes will continue to be the way to go going forward, because quite frankly the volatility could get you into serious trouble if you are not careful. Ultimately, the market goes to the 1.3450 level above. If we did break above that level, the market would continue to go much higher, as it with signal the next leg to the upside. However, I think that while we go through the process of negotiating the exit from the United Kingdom, it’s likely that the currency pair will be very volatile, as the British pound continues to be the epicenter of trouble. The market should continue to be difficult, but I do think that we are at least trying to form some type of bottom longer-term. If we did breakdown below the 1.26 level, the market then drops significantly. However, I still believe that the buyers are trying to make some type of stand.
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