GBP/USD Price Forecast – British pound gives up gains

Confidence in the British pound continues to be a major issue, as Teresa May has stepped away from having a vote on the Brexit deal, and it now looks as if the idea of a “hard Brexit” is very possible. As time goes on, the odds for that happening continues to climb, and that of course will continue to weigh upon Sterling. At this point, I believe that the 1.27 level above will continue to offer significant resistance, so until we break above there, I think you have to favor the downside.

GBP/USD Video 12.12.18

That doesn’t being that there won’t be the occasional rally, but those should be selling opportunities. Based upon the massive descending triangle that we have seen on this chart suggests that we are going to go much lower. In fact, if you measure the height of the triangle, it suggests that we will probably drop down to the 1.22 handle, an area that has been instrumental in support on historical charts. Currently, I don’t think there’s any reason to think we will go down to that level, so I believe that bad news will continue to push in that direction.

If we did break above the top of the candle stick from the Monday session, then we could go much higher, as it would wipe out a lot of resistance. Ultimately though, there’s almost no way we can accomplish that without some type of good news though, something that we have a severe lack of.

This article was originally posted on FX Empire

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