GBP/USD Price forecast for the week of February 12, 2018, Technical Analysis

The British pound had a bad week, slicing through the 1.40 level and rolling over rather drastically. However, when you look at the chart you can see that we have quite a bit of bullish pressure underneath, and I suspect that this pullback will be looked at as value overall. · FX Empire

Christopher Lewis

Updated Fri, Feb 9, 2018, 9:58 PM

The British pound had a rough week, slicing below the 1.40 level rather handily. However, when you look at the longer-term weekly chart, you can see that there is a clear uptrend line that we have been following. The pullback from this area makes sense, because if you look towards the beginning of 2016, there was a lot of noise right around this area. The market is trying to wipe out the losses from the vote to leave the European Union, and quite frankly has done quite well along the way. I believe that longer-term “smart money” is looking at the British pound as cheap and has been collecting it since the end of last year. Clearly, at the very least the downtrend has been massively disrupted.

With this in mind, is a long-term trader I would sit on the sidelines and wait for signs of support on a daily candle. I anticipate that the 1.3650 level will probably be the beginning of support, and most certainly the weekly uptrend line will do the same. It’s not until we break down below the weekly uptrend line that I would be concerned about the viability of the move higher, so therefore I think it’s only a matter of time before you can start buying the British pound as these pullbacks typically are signs that the market is trying to build up enough momentum to break through a major barrier.