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GBP/USD Price Forecast – British Pound Breaks Down

By:
Christopher Lewis
Published: Apr 21, 2020, 13:36 UTC

The British pound broke down during the trading session on Tuesday, as we started to see a lot of risk appetite selling in general. With this, it looks like the negativity of the marketplace is going to return, and therefore the British pound will probably suffer.

GBP/USD Price Forecast – British Pound Breaks Down

The British pound fell significantly during the trading session on Tuesday, reaching down below the 1.23 level, an area that of course would be a large, round, psychologically significant figure and caused a bit of support. That being the case though, it is a minor area when it comes to support, and I fully anticipate that we will break down through it. I anticipate that the 1.22 level is much more supportive, so if we were to break down below there then things could really pick up to the downside, reaching towards the 1.20 level.

GBP/USD Video 22.04.20

To the upside, believe that the 1.25 level will be a massive amount of resistance, not to mention the fact that the 50 day EMA is in that same area. The 61.8% Fibonacci retracement level has also been tracked just above the 1.25 handle, and therefore it makes quite a bit of sense that the market failed there. We had a technical set up, and then of course the fact that there is a massive amount of people throwing money at the US Treasury market, driving up demand for the US dollar as people are concerned. Ultimately, this is a market that I think has more downward pressure than up, and it simply has gotten a bit ahead of itself as of late. The breakdown during the trading session on Tuesday is clearly shot across the bow of the bullish traders out there. Ultimately, the candlestick looks very ugly, and that tells you pretty much all you need to know.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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