GBP/USD Price Forecast – British Pound Gives Up Early Gains
The British pound initially rose on Monday in a way of optimism that hit early. That being said, the market turn right back around to show signs of weakness. It is the usual nonsense out there about Brexit, and politicians posturing via the news media that is causing the volatility. Ultimately, this is a market that is likely to continue to be noisy going forward, and therefore you would expect more of the same. If the market were to get clarity at one point or another, I am not entirely sure what it would do. It has been so long since there has been clarity that most traders would have no idea how to handle it. Quite frankly, the “hard Brexit” is still a very real possibility, so nobody really knows what is going to happen next.
Looking at the shape of the candlestick, it does show a lot of weight around the neck of this market, and at this point in time, the market is likely to see a bit of exhaustion. All things being equal, the market is running out of steam and I think it is very likely that we go looking down towards the 1.30 level underneath to see if we get an opportunity to go long. The 50 day EMA underneath is a significant technical indicator that a lot of people will pay attention to, so at this point in time it is likely that people will continue to see reasons to buy the British pound eventually, but right now looks like we are ready for some type of short-term pullback.
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