GBP/USD forecast for the week of October 2, 2017, Technical Analysis
The British pound had a negative week after initially trying to rally, but as you can see we are very much in an uptrend. I believe there is significant support just below, and although this week might be a bit soft, I think that somewhere near the 1.33 possibly even the 1.3150 level, we will see buyers jump back into this market and push the British pound higher. The Bank of England looks likely to raise interest rates relatively soon, which is a bit of a surprise for traders around the world, and I think that this pullback is essentially going to be looked at as an opportunity to pick up the British pound “on the cheap”, and a little bit of momentum building to break above the gap lower at 1.3650, which was a result of the surprise vote to leave the European Union.
The 1.29 level should be the “floor” in the market, and it’s not until we break down below there that I would be concerned about the recent uptrend. If we can break above the 1.3650 level, the market should go much higher, perhaps reaching towards the 1.40 level above which would be the next large, round, psychologically significant number. I expect a lot of volatility, but that’s somewhat normal in this pair, especially considering that the outlook for both economies is a bit mixed right now, but I do believe that the British pound is starting to attract a lot of attention, and therefore we could get a bit of a pile on effect coming soon as well. A break above 1.40 census market looking for the 1.50 level, which I expect to see by the end of next year. In meantime, it’s going to be noisy.
GBP/USD Video 02.10.17
This article was originally posted on FX Empire