The British pound had gone back and forth during most of the session on Wednesday, as we await some support in this general area to continue to go higher. I think that in the short term, we are going to consolidate between the 1.35 level on the bottom, and the 1.36 level on the top. Overall, I believe that we will see plenty of buyers coming into this market given enough time, but the 1.3650 level above is massive resistance. There’s been a significant gap lower, and that is an area that I think that the market will struggle to get above. Once we do, it frees the British pound to go to much higher levels. In the meantime, I think that the market simply is going to go back and forth, grinding sideways.
If we were to break down below the 1.35 handle, the market probably goes looking towards the 1.34 handle underneath, which would be the next support level. Under there, there’s even more support at the 1.3333 handle, which is a massive level for buyers as far as I can see. There is also an uptrend line underneath, which should keep the market afloat as well. I believe that the British pound had been oversold and that the Forex markets are starting to correct that. Beyond that, the US dollar looks vulnerable going into 2018, and that could help this market as well. If we were to break down below the 1.3333 handle, then I must rethink my entire outlook for this pair.
GBP/USD Video 11.01.18
This article was originally posted on FX Empire
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