GBP/USD Forecast Today 29/11: Eyes Breakout (Chart)


(MENAFN- Daily Forex)

  • The first thing that I see is that the market has pulled back just a bit to show signs of weakness, only to turn around and show signs of life.
  • The 1.27 level has been a massive barrier over the last couple of weeks that I think will capture a lot of attention.
  • At this point, it looks like we are doing everything we can to break out above there, but we haven't done so yet, and it is probably worth noting that the Thursday session was Thanksgiving, so there was only so much in the way of liquidity once New York opened.

On the other side, if we were to drop from here, I think there is a massive amount of support down near the 1.25 level. Ultimately, we are leaning toward the upside, and I do think that we are starting to see the US dollar give up some of its strength against certain currencies that are a little better suited to prevail at this point. The British pound has been very stubborn against the greenback in relation to other currencies, so it's possible that we could see the British pound lead the way to any type of sell off when it comes to the greenback.

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I think this comes down to whether or not the US dollar starts to strengthen. If it does, then that will more likely than not kill the idea of a breakout. We will probably drop from here to go down to the 1.25 level. Anything below the 1.25 level would be extreme US dollar strength, and you would probably just see the US dollar swallow almost everything, and at that point in time it's possible that we could see the best traits being shorting other currency such as the euro or the Australian dollar. While the British pound would drop in that scenario, may not drop as quickly.

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On the other hand, if the US dollar starts to weaken everywhere else, it's likely that we would see the British pound lead the way and it could move much quicker than others. At that point in time, I think we will probably go looking to the 1.2850 level rather quickly. Keep in mind the 200 Day EMA is in that same vicinity.

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