GBP/USD Price Forecast – British pound grinds higher on Friday

The British pound rose slightly during the day on Friday, reaching towards 1.2750 level and quiet trading. This is an area that of course is important, as it is not only psychologically important, but it has been structural support in the past, making it structural resistance now. · FX Empire

Christopher Lewis

Updated Fri, Aug 17, 2018, 9:45 PM

Obviously, the most important thing affecting the British pound right now is the Brexit, or the lack of deal. Because of this, the British pound has continued to be very soft but I think at this point we are starting to run out of sellers. Quite frankly, people are already pricing in the idea of a no deal Brexit, so I think the downside is starting to become somewhat limited. In fact, it would not surprise me at all that even if we broke down from here the 1.25 level would be the floor. While I wouldn’t jump in quite yet, this could be setting up as a career making trade to the upside. As things stand right now, I would need to see this market clearing the 1.28 level to even begin to think along those lines. I suspect that short-term rallies will probably be sold, although it should be pointed out that the US dollar looks to be softening against several other currencies as well.

If you’re playing the global growth story, and perhaps better relations between some of the trade war participants, this is not the pair to trade. That’s because although it may get a bit of a bump higher with good news, at the end of the day it’s still all about the Brexit here. If you try to make that trade, play the Australian dollar. Otherwise, if we get good news coming out of the United Kingdom, this will be the place to be.