GBP/USD Forecast July 12, 2017, Technical Analysis

The GBP/USD pair initially tried to rally during the session on Tuesday, but found quite a bit of selling pressure near the 1.2925 handle. This was based upon MPC Member Broadbent suggesting that perhaps monetary policy wasn’t going to be as hawkish as people had thought. Because of this, the British pound has suffered a significant amount of bearish pressure. However, there is quite a bit of support near the 1.28 level, and this knee-jerk reaction is probably short-term at best. Because of this, I think we will find a buying opportunity below, but we need the markets to calm down slightly to start picking up value. If we break down below the 1.28 level, that’s an obvious breakdown of support, and that would tell a completely different story. However, the market looks as if the buyers will probably find that area a value proposition, and at the bounce or supportive action coming back into the market, I am more than willing to start going long.
Knee-jerk reactions rarely last
Although the British pound it gets sold off rather hard, the reality is that we have only dropped about 60 pips since this comment. Because of this, I think this a short-term at best, and I believe that given enough time value will win out over panic. If we do breakdown below the 1.28 level, then I think we go looking for support at the 1.26 level after that. I believe that we are in the midst of a potential trend change, on the longer-term charts of course, and that is always a very volatile and difficult a fair to deal with. Because of this, I am still looking for buying opportunities but clearly don’t see one quite yet. I will keep you up-to-date here at FX Empire when I see a change.
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