The British pound continues to grind lower longer term, and the downtrend line that is on the chart suggests that we could start selling again. The Federal Reserve will course have its statement that will affect the market, but longer-term I think this is more about the Brexit anyway. The market has a significant amount of pressure above there, extending all the way to the 1.33 level. I think at this point, the 1.33 level above is a massive resistance barrier and I think it is going to be difficult for the British pound to break out to the upside but if we were to clear the 1.33 handle, then I think you can start to look for a bigger move.
GBP/USD Video 09.11.18
The 1.27 level underneath is massive support, and I think that if you look at this market you can see a potential descending triangle. That descending triangle moves the market down to the 1.22 level if it breaks down, and at this point think that the market will break down rather significantly. Ultimately, if we break above the 1.33 level I think that we will grind higher in that adding slowly for a bigger position over time might be the way. Ultimately though, we would need some kind of good news involving the Brexit for this pair to rally. I don’t see that happening in any meaningful way in the short term, and as the descending trend line is reliable so far, so there’s no need to fight it.
This article was originally posted on FX Empire