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GBP/USD Price Forecast – British pound continues to slide

The British pound continues to slide during trading on Friday, as the relief rally after Teresa May avoided a no-confidence vote has been completely wiped out. She went to Brussels, and they offered her nothing in return. The odds of a hard Brexit are increasing by the day.

The British pound has broken down during the Friday session, slicing through the bottom of the shooting star that had formed on Thursday. After the relief rally due to Teresa May avoiding a no-confidence vote, the British pound has continued its downward trajectory. Based upon the descending triangle above, I have a target of 1.22, and quite frankly I don’t think it makes any sense to be buying this market right now. Rallies at this point will continue to attract selling pressure, especially as the US economy is doing relatively well.

GBP/USD Video 17.12.18

Ultimately, I think that the market continues to offer short-term selling opportunities on these little rallies, but if you are a longer-term trader, you probably have been short of the British pound for some time and will probably continue to be so. The 1.27 level above should be a massive resistance barrier, as it was such significant support previously. Because of this, I think that any time we approach that level, sellers will come back in. If headlines cross that are relatively positive for the idea of the Brexit, look for algorithmic traders to jump in, but those rallies continues to be faded and continue to cause a lot of pain for those who are foolish enough to take them. Because of this, think of any rally as an offer to pick up the US dollar “on the cheap.” I don’t have any interest in buying the British pound until the Brexit situation is settled, something that is going to take a significant amount of time.

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This article was originally posted on FX Empire

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