GBP/USD Price Forecast – British Pound Breaks Down a Bit

GBP/USD Video 12.06.20

The British pound has broken down a bit during the trading session on Thursday, as the market is reaching towards the 1.2635 handle. This is where the market has found resistance in the past and has even seen support over the last couple of sessions. Because of this, it makes sense that we would see the market find buyers there.

The 200 day EMA is sitting in the same area, so I think that this will be a formidable support barrier. However, if we break down through it, we could open up the door down to the 50 day EMA which coincides roughly with the 1.2450 level. A breakdown of that level of course extends the longer term downtrend, but I think at the very least what we are looking at is a pullback. A pullback would be extremely healthy, because it would give people a chance to not only take profits, but others who have missed the move higher to get involved again.

It should be noted that the 1.2750 level above has been resistance and support in the past, and the fact that we pulled back from there should not be a huge surprise either. Quite frankly, it looks to me like we are setting up for a very messy and choppy sideways couple of sessions. All things being equal, I think that we are looking at a scenario where it is going to be difficult to move anywhere for a bigger move, but once we do break out of this little area, it should allow for a bigger trade.

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