GBP/USD Price Forecast – British Pound Slams into Familiar Resistance

The British pound has initially tried to rally during the trading session on Monday to kick off the week, slamming into the 1.2650 level again. At that level, we have seen a lot of resistance extending all the way to the 1.2750 level, which is what we have seen over the last several months. At this point in time, if we were to break above there, I think it would be a major sign of British pound strength. In fact, I believe it would open up a move towards the 1.30 level above.

GBP/USD Video 21.07.20

All that being said, it is obvious that we have a lot of support underneath, so if we do pull back I do not necessarily think that it is going to be easy to sell this pair, especially with the 50 day EMA underneath being so stringent as support. The 50 day EMA, colored in red on my chart, has been starting to slope a little bit higher and has been somewhat supportive as of late, so paying attention to that indicator does seem to make a bit of sense.

If we were to break down below there, then it is likely that we go down towards the 1.2250 level. That area has been massive support, but one would have to think that for which towards that area it would be a little bit rattling for the buyers of the British pound. All things being equal though, I do like the idea of buying dips or possibly breakouts in general as to the Federal Reserve is so loose with its monetary policy.

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