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GBP/USD Price forecast for the week of March 19, 2018, Technical Analysis

Christopher Lewis
Updated
The British pound rallied during the week, slamming into the downtrend line that has been a thorn in the side of the buyers. We tested the 1.40 level, but we look likely to close underneath that mentioned downtrend line. However, we have a couple of very clear signals if things work out in our way.

The British pound rallied significantly during the week, slamming into the 1.40 level, a key psychological level. I think if we can break above there, the market will more than likely go looking towards the 1.43 level above, which has been important in the past. I recognize that the market has been a bit lackluster over the last several weeks, but ultimately, I think that the market is probably driven more by what’s going on the United States than anything else. The British pound is being bought based upon the idea of inflation in the United Kingdom as well, so there’s that the think about.

GBP/USD Video 19.03.18

There’s also a lot of noise above, so even if we do break above the 1.40 level, I don’t think it’s going to be easy to make the next move. This is going to continue to be very noisy trading in general, and quite frankly the easiest trade to take would be a breakdown of the uptrend line underneath, shorting this pair below 1.3650 or so. However, nowhere near there, so it looks like we are going to continue to “climb the wall of worry” longer term. That makes for difficult trading, at least from a psychological standpoint. Because of this, you probably want to keep your position size small, and then add as things work out in your direction. Above the 1.43 handle, we then probably go to the 1.45 level after that.

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This article was originally posted on FX Empire

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