GBP/USD Price Forecast – British Pound Continues to Break Down

The British pound has struggled a bit during the trading session again on Friday, as we go looking towards the 1.20 level over the longer term. This does not mean that we cannot bounce obviously, but clearly, we are on the precipice of breaking down. With that in mind, I think that rallies will continue to be sold into, and quite frankly could offer a nice opportunity. The British pound of course has been one of the weakest G 10 currencies, so it should not be a surprise at all to see that it is on the precipice of making another big move lower.

GBP/USD Video 18.05.20

To the upside, I anticipate that the 1.2350 level is now significant resistance, as it has seen major selling in that area on short-term charts. Above there, we have the 50 day EMA which of course is going to cause a certain amount of resistance as well. I like the idea of fading rallies and I believe that the British pound has put its top in as the market had gotten ahead of itself. Pulling back from the 61.8% Fibonacci retracement level is a technically sound signal, so therefore it looks as if we are going to roll over and continue. The 1.20 level will be psychologically important, but it is very likely that we go much further than that if the situation in the United Kingdom does not change and of course the global growth situation does not get any better as the US dollar is considered to be the “safest” currency. US Treasury markets have brought and a lot of inflows, and I anticipate that will probably continue to be the case.