GBP/USD Forecast May 29, 2017, Technical Analysis

GBP/USD daily chart, May 29, 2017

The British pound fell apart during the session on Friday, as election polls are starting to throw down into what the election results will be. This being the case, there are a lot of questions as to how the exit negotiations will go with the European Union, but ultimately, I think this will be looked at as a potential buying opportunity. There is a massive amount of support below at the 1.2750 level, an area that was massively resistive in the past. If we get any type of stability at all, I think that the buyers will pile in it that area and push much higher. In the meantime, it almost looks certain that we are going to drop to at least that level, so short-term rallies might be a selling opportunity. This would be for short-term traders only, as the market is very difficult to fight.

Back and forth

This market should continue to be back and forth, as headlines will continue to dominate when it comes to the exit. With this, I think the British pound will be one of the more volatile markets, but quite frankly that’ll be good for traders. Pay attention to the larger support and resistance levels, such as the 1.2750 level, which means that the longer-term traders are still in control. In the meantime, though, it’s very easy to get caught up in the drama, but I ask you not to as it’s a very easy way to get shaken out of the market. Ultimately, the market should continue to see headlines make volatile moves, meaning that you have to be very diligent with your stop losses and perhaps cut down your typical position size until we get some type of stability. Maybe adding small positions as we go along will be the best way. If we were to break down below the 1.2750 level, all bets are off for the buyers.

Written by FX Empire