GBP/USD Forecast October 12, 2017, Technical Analysis

The British pound went sideways initially during the day on Wednesday, as we continue to go back and forth between the 1.32 handle. I believe that the market will continue to bounce around this area, with a lot of volatility. I think that the market should continue to be choppy, but I think that given enough time we will find some type of footing for the market. Longer-term, I still believe that we are going to go to the 1.3650 level, which was the scene of the gap lower after the vote to leave the European Union came out. I think in the meantime, we are paying attention to several different factors of the same time it, not the least of which is the Bank of England looking likely to raise interest rates. If they do, that of course is going to be good for the British pound, but as we look at this chart, we are looking at the market trying to figure out which way to go in the short term. I think that we were paying attention to the FOMC Meeting Minutes, as an overly hawkish Federal Reserve could send this market back down towards the 1.30 level.
Longer-term, I still believe in the efficacy of the uptrend, but we could get short-term volatility. I think that if we see some type of supportive candle after a pullback, that should be a nice buying opportunity. Alternately, if we break above the 1.3250 level, then the market should continue to go much higher as well. I don’t have any interest in shorting this market until we would break down below the 1.30 level, which would be a very negative sign. Ultimately, that would change my overall outlook for this market, but until then I think it’s going to take a certain amount of patience to deal with the choppiness.