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GBP/USD Price forecast for the week of February 12, 2018, Technical Analysis

Christopher Lewis

The British pound had a rough week, slicing below the 1.40 level rather handily. However, when you look at the longer-term weekly chart, you can see that there is a clear uptrend line that we have been following. The pullback from this area makes sense, because if you look towards the beginning of 2016, there was a lot of noise right around this area. The market is trying to wipe out the losses from the vote to leave the European Union, and quite frankly has done quite well along the way. I believe that longer-term “smart money” is looking at the British pound as cheap and has been collecting it since the end of last year. Clearly, at the very least the downtrend has been massively disrupted.

With this in mind, is a long-term trader I would sit on the sidelines and wait for signs of support on a daily candle. I anticipate that the 1.3650 level will probably be the beginning of support, and most certainly the weekly uptrend line will do the same. It’s not until we break down below the weekly uptrend line that I would be concerned about the viability of the move higher, so therefore I think it’s only a matter of time before you can start buying the British pound as these pullbacks typically are signs that the market is trying to build up enough momentum to break through a major barrier.

GBP/USD Video 12.02.18

This article was originally posted on FX Empire