The GBP/USD has performed with a solid bullish trend since the end of the third week in September and has resumed a challenge towards its higher value price range which peaked in late August near highs of 1.33950. However, technical charts suggest speculators still have time to take advantage of the rather consistent volatility within the British Pound and pursue its potential choppy waters in the coming days.
There remains no clear outlook regarding the result of the current Brexit talks with the UK and Europe. Investors have become accustomed to the tedious reports warning about the dire effects of Brexit and what Britain going it ‘alone’ will mean for its economy. However, as a counterweight, Europe certainly remains involved within the discussions because the continent has quite a bit to lose too if an unsatisfactory ending to this divorce tale does not emerge. This acts as an optimistic note it must be acknowledged for British Pound bulls.
The value of the GBP/USD remains a tantalizing question and without a known result the forex pair continues to deliver a rather incredible range for speculators to engage. While the British Pound has been a favorite of many financial institutions for its rather secure value historically and the Bank of England’s conservative and transparent nature, the past handful of years have shed some of these foundations and called into question the stability of the GBP.
Resistance is certainly being tested short term by the GBP/USD and the forex pair did put in a very solid climb higher yesterday, but traders should ask if the gains were too much too soon? It is possible smart money knows something that is not being shared with the public, the sudden burst of value within the GBP/USD happened quickly and occurred on a day when risk-averse trading globally was providing challenging circumstances within other financial assets. This points out that speculators need to be careful while trading the British Pound because of its ability to provide abrupt movements.
Speculators may be tempted to sell the GBP/USD and look for reversals downward from these rather lofty value heights. Yes, the British Pound may continue to attract buyers, but risk-reward scenarios when contemplated suggest without a clear outcome regarding the Brexit talks short term, some bearish momentum may be generated again for the GBP/USD. Selling the GBP/USD near the 1.31350 to 1.31400 value range may prove a worthwhile endeavor for speculative traders.
GBP/USD Short Term Outlook:
Current Resistance: 1.31700
Current Support: 1.30850
High Target: 1.32300
Low Target: 1.29300
