GBP/USD Forecast: Continues to Threaten a Major Big Figure

• The GBP/USD has gone back and forth during the trading session on Thursday as we continue to hang around the 1.20 level. The 1.20 level of course is a large, round, psychologically significant figure, and the gateway to going lower.
• The 1.1850 level underneath would be a significant support level, and therefore I would anticipate a certain amount of buying pressure.
• On the other hand, the market is continuing to struggle with the idea of whether we are going to see more “risk on”, or if we are going to see more “risk off.”

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It’s worth noting that the 200-Day EMA is sitting above at basically the top of the candlestick from the previous session. If we can break above there, then we will threaten the shooting star from the Tuesday session, opening the possibility of a move to the 1.24 level. The 1.24 level offers resistance all the way to the 1.25 level, and therefore think you’ve got a situation where a lot of people would be paying close attention to that region as a major barrier.

 Noise Ahead

We have also pointed out recently that there was a bit of a “double top”, so if we can break above that it would be likely to be a bullish sign. In that scenario, I think that the British pound would probably end up going to the 1.30 level rather quickly.

On the other hand, if we break down below the 1.1850 level, then it’s likely that we would see a move down to the 1.15 level. The 1.15 level has been important multiple times and of course, as a certain amount of psychology is attached to it. With that being the case, I think we’ve got a situation where the markets will continue to be very noisy and could look at that as a potential bottom. This would obviously be “risk off”, but we will have to wait and see whether the market will continue to favor the downside. It certainly looks as if we are struggling to pick up any real momentum, so I do believe that it is probably only a matter of time before we see the market must make a bigger decision. Once we do get that decision, there are a couple of obvious levels that we can look for.

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