GBP/USD Price Forecast – British Pound Breaks Major Resistance

The British pound has rallied to break above the 1.2750 level during the early hours on Wednesday, as the world awaits the Federal Reserve decision, which is expected to be almost no change, with perhaps the exception of a potential yield curve control measure. All things being equal, this is a market that I think need to go much higher, and certainly looks ready to do so. Unless of course Jerome Powell says something stupid, it is likely that we will continue to see more of this action.

GBP/USD Video 11.06.20

The candlestick for the trading session on Tuesday was a dip to test the 200 day EMA for the second day in a row, so now it looks likely to continue to go higher. Ultimately I believe that the market will probably try to use that as a bit of a floor now, and as long as the Federal Reserve does not do something to spook the market, it is very likely that the 1.26 level is now going to be the “floor” of the market due to the 200 day EMA there, and of course the scene of the previous resistance.

From a historical perspective, the British pound is ridiculously cheap, so it does look like we are ready to go much higher for the longer-term move. In fact, longer-term traders are probably going to go for the big move, as the market could go all the way to 1.50 over the next several years. Obviously, that is something that short-term traders will only be thinking about, but it clearly looks as if the direction to the upside continues.

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