GBP/USD Forecast July 20, 2017, Technical Analysis

The British pound went sideways on Wednesday, hovering above the 1.30 level. This is an area that continues to be important, not only from psychological standpoints, but the fact that it was where the market had originally broken out a. What I find interesting is that we can’t make a decision yet, so it’s likely that there will still be a lot of choppiness in this market. I think that the market will continue to be one that supported near the 1.30 level but I am the first to admit that we are very sideways at best. That is a sign that the market is trying to figure out what it wants to do. Ultimately, I think that the British pound wants to rally, but the CPI numbers coming out of the United Kingdom the other day were very negative, and I think it gets people a bit concerned about being long of the British pound. I think if we can reach to the upside, the market will probably go looking for the 1.31 handle, and then eventually the 1.3450 level above there. That is the top of the consolidation from previous trading, and the markets do tend to like to go from “point a to point B.”
Buying pullbacks
I think that in general a lot of traders are looking to buy pullbacks, so given enough time I think that the buyers will continue to be relatively aggressive. If we break down below the 1.2975 level, I think that the market will continue to drop from there. Given enough time, I do think that we are trying to break out of the longer-term consolidation, and in fact have to a certain extent. Longer-term, I believe that the one thing you promote probably count on is going to be volatility and choppiness.
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