The British pound has been all over the place for the last couple of months, but quite frankly I don’t know that there’s going to be any of relief coming. When you look at the chart, you can see just how back and forth this has really been. As long as there is plenty of drama around the Brexit, and there of course will be, there’s going to be a serious lack of direction here. I do think that given enough time though we may see a conclusion, and that should lead to only one move.
Any resolution we get with the Brexit should be positive for the British pound, if for no other reason than to bring some certainty into the market. If and when we get that certainty, I fully anticipate that this market will go looking towards the 1.3450 level, and then try to break above the 1.35 handle. We could even break above there and continue to go as high as 1.42.
However, we have a lot of work to do between now and then and I think it’s very likely that with the Brexit delayed the way it has been, we may get a fairly quiet month. If that’s going to be the case then I think the occasional headline will move the pair but that’s about it. I would anticipate a lot of support at the 1.29 level, and a lot of resistance at the 1.32 level. Short-term back and forth trading is probably going to be the mainstay of how we trade the GBP/USD pair, especially considering that seasonally we tend to see a lot of consolidation during this time of year anyway.
Sadly, until we get some type of resolution with the politicians, it’s very unlikely that we can really get things going.