GBP/USD Price Forecast November 8, 2017, technical Analysis

The British pound fell significantly during the trading session on Tuesday, reaching down towards the 1.31 handle. This is an area that begins significant support, extending down to the psychologically important 1.30 handle. There is both horizontal support on the chart as well as an uptrend line. Ultimately, any type of bounce from here should be thought of as a value proposition. The market looks likely to rally and continue the bullish pressure that had been seen on Monday, and a move to the 1.3250 level seems very likely. If we can break above there, the market should then go to the 1.33 handle, before reaching towards the 1.35 handle. Ultimately, the marketplace will continue to be volatile regardless, because there are strong expectations for interest rate hikes in the United States, but also there has been a case for inflationary pressures and the United Kingdom.
We recently heard Mark Carney suggest that interest rate hikes will be gradual, perhaps much more so than originally thought, so I believe that the market will continue to be volatile and choppy, so it’s likely that small position sizing will be needed. Ultimately, this is a market that should continue to be noisy, but I do think that the support will hold overall. The longer term, if we can break above the 1.3650 level, the market should continue to go much higher. That would be more of a “buy-and-hold” scenario, and would have me much more aggressively bullish. In the meantime, and by that I mean several months, we could find ourselves jumping around with no clear directionality for any length of time. If we were to break down below the 1.30 level on a daily close, that might be enough to send this market down to the 1.2750 level.