Advertisement
Advertisement

GBP/USD Price Forecast – British Pound Breaks Down Below the 200 Day EMA

By:
Christopher Lewis
Published: Mar 12, 2020, 14:26 UTC

The British pound broke down below the 200 day EMA during the trading session on Thursday, showing further weakness going forward.

GBP/USD

The British pound initially tried to rally but then broke down below the 200 day EMA. Whether or not we find support here is somewhat irrelevant, because quite frankly this is all about the coronavirus and the US dollar is considered to be a bit of a “safety currency”, and therefore it makes more sense that we continue to fall than anything else. Rallies at this point will probably be sold into, and I do think that the British pound makes its way down to the 1.25 handle below.

GBP/USD Video 13.03.20

The 1.25 level should offer a certain amount of psychological and structural support, but at this point we could get a short-term bounce and reach towards the 1.28 handle where on short-term charts you can see a bit of trouble as well. Regardless, I’m not a buyer the British pound right now, not necessarily anything to do with the British pound itself, but the US dollar is going to benefit just from the simple fact that people are rushing into treasury markets again. That being said, if we do break above the 1.28 level then we could go looking towards the 50 day EMA which is currently at the 1.30 level. However, the fear is extraordinarily palpable, and it seems as if the market hasn’t bottomed quite yet as far as the fear gauge is concerned.

If we break down below the 1.25 handle, the market could go looking towards the 1.20 level over the longer term. In the short term though, the 1.25 level should offer some sense of support so I would anticipate a short-term bounce if we do fall to that level.

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.

Did you find this article useful?

Advertisement