GBP/USD Weekly Price Forecast – British Pound Forms Exhaustion Candle
The British pound rallied during most of the week to reach towards the 1.42 handle. That is an area that has been important on the weekly chart more than once, and the fact that we pulled back from there should not be a huge surprise. However, the velocity that we got there is the biggest issue, as there is a certain amount of exhaustion coming into the market. When you look at the angle of the market, you can see we have shot straight up in the air and it certainly looks overbought. That being said, I think a pullback makes the most sense at this juncture.
GBP/USD Video 01.03.21
I would anticipate that the British pound probably pull back a bit further, maybe down to the 1.2750 level or so. In that general vicinity I would anticipate seeing quite a bit of buying, and that general vicinity I would anticipate that there would be plenty of support between there and the 1.35 handle, so I will be watching the weekly chart for clues as to what the next move might be. Ultimately, this is a market that I think needs a little bit of a buildup in order to continue the upward momentum. I think there is significant resistance above, but if we were to break above the 1.42 handle, then we could go to the 1.45 handle longer term. In general, this is a market that remains bullish longer term, but we simply need to pick a better spot in order to get long again. Furthermore, the so-called “golden cross” is about to happen on the weekly chart as well. (I do not find this very helpful most of the time, but some people like it.)
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This article was originally posted on FX Empire
