Start Trading Now Get Started
Table of Contents
Advertiser Disclosure
Advertiser Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

GBP/USD Forecast: Continuing Rollover - 16 August 2019

By Christopher Lewis

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex...

Read more

The British pound should continue to rollover at this point, although we have rallied quite nicely during the trading session on Thursday. That being said we ended up rallying right into the previous consolidation area, and as you can see it has caused quite a bit of trouble. As we had given up quite a bit of the gains during the trading session at the end of the day, I suspect that Friday will see a bit of selling. This makes a lot of sense of course, because we are in a downtrend and the British pound should continue to sell off due to the fact that the Brexit is massive confusion just waiting to happen.

The market continues to favor the US dollar due to the Treasury market and of course the bond market needs those US dollars to function. It builds up demand for the greenback, and in a scenario where we are worried about the Brexit and the uncertain coming out of the United Kingdom, it makes sense that this pair favors the continuation of the downtrend.

To the upside, the 1.22 level is the top of the previous consolidation area so I look at that as a major resistance barrier. Beyond that, the 50 day EMA has sliced through what was previous consolidation and support, so I think the 1.2350 level will be a bit of a “ceiling” in the market. To the downside, I see the 1.20 level as an area that should offer quite a bit of support as it is psychologically important, but it’s only a matter of time before we break down below there and go looking towards 1.18 level next. The closer we get to the Brexit, the more dangerous the British pound is going to be to own as there just is nothing along the lines of certainty in this market, and as you probably know, financial markets hate uncertainty.

Eventually we will get some type of resolution to the Brexit, even if it is to have no deal. Once we get the last “major flush lower”, I think that will be a career making buying opportunity for large traders out there. In the meantime though, we are nowhere near that as the deadline isn’t until October 31 for the United Kingdom to leave the European Union. Expect a lot of choppiness between now and then, but the negativity should continue.

GBPUSD

Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Most Visited Forex Broker Reviews