British Pound to US Dollar Weekly, Sunday 26
GBP/USD: Decline before Christmas presents opportunities
The British pound suffered a fairly sharp decline last week before the start of the Christmas holidays, and the currency pair is approaching late November values.
Traders looking to enter speculative bets on GBP/USD in the coming days should be aware that they are entering potentially dangerous waters. There will certainly be betting opportunities for day traders looking to get involved in GBP/USD, but holiday volumes are light on forex and the currency pair’s sharp decline over the past week and a half sets the tone for a challenging week.
After falling to near the 1.19960 mark on December 22nd, GBP/USD suddenly found signs of testing its value last seen in late November. After the storm there was a reversal to the downside and on Friday GBP/USD traded near 1.20900, but at the end of the week the pair closed around 1.20510.
Experienced speculators may wonder about the results of the GBP/USD pair
Certainly, the value of the GBP/USD pair heading into the extended Christmas weekend should certainly be considered a legitimate rate, but some traders may feel that the selling was too strong. There will be very little economic data in the coming days until the end of the New Year holidays. Therefore, there will be no large trading volumes in GBP/USD. Which means GBP/USD could be exposed to unbalanced trades that could trigger the forex market with volatility and results that don’t seem to correlate with technical and fundamental perceptions.
- Important medium-term support was tested on Thursday, as November values were suddenly seen again. If it continues to fall below 1.20000 this week, it could cause traders to worry technically.
- The highest price for the GBP/USD pair was last week on Monday when the pair traded near 1.22420.
The GBP/USD trading range could be surprisingly quiet and aggressive in the coming days
Inexperienced traders looking to continue speculating during the off week should brace themselves. GBP/USD could be completely quiet with little price, seemingly providing an opportunity to bet on quick trades testing support and resistance levels. However, GBP/USD’s decent run can be loudly interrupted by the appearance of a sudden big move that leaves all speculators wondering what happened. This can happen if a large position is taken in GBP/USD, which is unexpected and makes the currency pair currently weak.
GBP/USD Weekly Forecast:
The speculative price range for GBP/USD is 1.19900 to 1.22350
On December 14, GBP/USD traded close to a high of 1.24490, an important achievement considering the pair was below 1.0400 in the last week of September this year. The sudden decline in the value of GBP/USD recorded over the past week and a half could be the result of a mix of selling that took place as some financial houses believed that the British pound was overbought given the lingering economic problems still facing the United Kingdom.
Technically, last week’s selloff could be of interest to traders who believe that the 1.21500 mark, after containing the decline, was important. However, seasoned speculators may consider the idea that the selling action on Thursday and Friday was driven by somewhat light volume and may not be a true insight into where the GBP/USD balance should be next week. Day traders trying to track GBP/USD in the coming days should not expect a sudden 100% jump in value, as what proved to be difficult trading conditions at the end of last week could continue in the coming days.
GBP/USD may look oversold at its current depths, but traders should be cautious. This week’s values are definitely accurate and reflect actual prices. Trading during the holiday season has proven somewhat problematic and scalpers need to monitor their positions and be able to react quickly. Using strong risk management in GBP/USD will be important this week.
