GBP/USD Price Forecast October 17, 2017, Technical Analysis

he British pound has been volatile during the Monday session, dropping down to the 1.3250 level and then bouncing. That being said, I believe that the area that has been massively important in the past should continue to attract a lot of attention. I think at this point, the market will then try to break out to the upside, perhaps reaching towards the 1.35 level next. Longer-term, the real prize is the 1.3650 level above, as it is the scene of the gap lower from the surprise Brexit results. If we can break above there, the market is free to go much higher, and of course currency traders are paying attention to the fact that the Bank of England looks likely to raise interest rates. Concurrently, the Federal Reserve is looked at with a bit of suspicion when it comes to interest rate hikes, especially after a lower than anticipated CPI figure release last week.
Buying dips continues to work, but I recognize that the volatility is going to be rather high when it comes to trading the British pound. After all, not only do we have everything I’ve mentioned previously, but we also have headlines coming out of both London and Brussels that will continue to move this market around. After the significant amount of bullish pressure from a couple of days ago, it makes sense that we should continue to find buyers on dips. Ultimately, I don’t have any interest in shorting this market, least not anytime soon, because I think that there are plenty of supportive levels underneath that will attract attention, and ultimately those will be opportunities for those who are nimble enough to take advantage of the short-term moves. Longer-term, I think that the most profitable positions will be those who are build up over time.