GBP/USD Price Forecast November 14, 2017, Technical Analysis

GBP/USD daily chart, November 14, 2017

The British pound gapped lower at the open on Monday, and then fell towards the 1.3050 level. This is the bottom of consolidation, and therefore the bounce that we have seen so far is not a huge surprise. I suspect that the uptrend line on the daily chart and of course the psychologically important 1.30 level underneath should both continue to attract buying pressure. I don’t know that we break out or anything like that, just that the consolidation goes back and forth, so short-term traders will continue to be attracted to this market, trading in both directions and in small pieces. I believe that the 1.3250 level above will be resistive, but, the overall consolidation area extends to the 1.3333 level. If we were to break above there, the market then goes to the 1.35 handle, and then the 1.3650 level which was the scene of the gap lower after the vote to leave the European Union.

Much of the bearish pressure during the day on Monday would have been due to over 40 MPs in the United Kingdom showing no confidence in Teresa May, and the lack of unity of course is something that people are concerned about when dealing with the negotiations with the EU. Overall though, I think this has been a bit of an overreaction, so it’s not until we break down below the 1.30 level that I would be concerned about the consolidation area being broken down. Back and for trading in small increments will probably continue to be the best way to trade the British pound, and right now I don’t see much in the way of momentum or news flow that will change things, as the British pound seems to be in its own universe currently.

Written by FX Empire