GBP/USD Price Forecast February 19, 2018, Technical Analysis

The British pound has broken down significantly during the trading session on Friday, reaching down towards the 1.40 level. This is an area that should be supportive, based mainly upon the large, round, psychologically significant nature of the figure. However, it wouldn’t surprise me boo broke down a little bit further, but I believe that there are buyers underneath. Ultimately, this is a market that if we can find buyers in, we should continue to go much higher and that of course is my thesis.

In fact, I have no interest in shorting this market, I believe that the US dollar will continue to struggle due to the bond markets selling off, and that’s essentially what is going to continue to weigh upon the US dollar longer-term. In the meantime, this market will be sensitive to the risk appetite around the world, and it seems as if it did sell off a bit during the trading session on Friday overall. Stock markets were down, some commodity markets got hit, and of course that should continue to favor the greenback in the short term. Longer-term though, I think there is a lot of appetite for risk assets out there, and that helps the British pound, not necessarily because the British pound is considered to be risky, more that it is the reaction to the greenback.

Longer-term, I believe that the 1.43 level above will be the target, based upon longer-term charts. That doesn’t mean that we won’t get a significant pullback, and that doesn’t mean that the 1.40 level will be broken to the downside, but I think that is far too much buying pressure underneath to think that we are going to melt down.

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