GBP/USD Price Forecast – British Pound Continues To Move Upon Rumor

The British pound continues to be all over the place, as we initially tried to rally during the trading session on Wednesday but found enough resistance at the 1.2850 level to roll over and go looking towards the 200 day EMA. That offered support, which from a technical analysis standpoint makes sense but the biggest problem with this market is that we continue to see headlines and even more obnoxious Twitter feeds spoofing the market with rumors. One minute it is “EU sources state Brexit deal close”, only to be turned around and denied by actual officials.

GBP/USD Video 17.10.19

The British pound has been inundated with algorithmic traders, who have programs that read these feeds. At this point, even if we do have a nice trend change for the longer-term, you should be able to find some type of value on a pullback. Jumping in and buying this market here is simply chasing the trade. It’s about 600 pips higher than it was just five trading sessions ago. One of those trading sessions was essentially unchanged. In other words, you can’t chase the trade all the way appear. If it is a trend change, we will get a significant pullback that shows signs of support yet again. The 1.30 level above would be the target, but eventually I think we can break above there. However, what is truly concerning is that the market could take suddenly on bad news. Don’t kid yourself, if things fall apart this market will as well. Granted, it looks good so far but I still believe in waiting for value.

Please let us know what you think in the comments below

This article was originally posted on FX Empire

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