GBP/USD Price Forecast – British Pound Continues ConsolidationThe British pound has dropped a bit on Wednesday to kick off the session but did find a little bit of minor support near the 1.28 handle.
The British pound has pulled back a bit during the trading session on Wednesday but sees a bit of support near the 1.28 level on the short-term charts. All things being equal though, the market is seen resistance at the 50 day EMA which is colored in red, just as we are seeing a bit of support near the 200 day EMA which is colored in black. All things being equal, we are grinding a bit lower, perhaps in a bit of a channel. It is because of this that I like fading short-term rallies, especially if we get some type of bigger “risk off” type of scenario.
GBP/USD Video 01.10.20
Looking at this chart, if we can break down below the 1.27 handle, it will more than likely open up a bit of a “trapdoor” to the 1.25 handle. I do not have any interest in buying this market, because quite frankly this is a market that looks very sick and of course there are a massive amount of reasons to think that the British pound could struggle. We have Brexit still going on and of course we have all kinds of issues.
The United Kingdom is talking about locking down parts of its economy again, even though it has been shown not to make that big of a difference. Regardless of your opinion on this, the one thing that most people will recognize is that an economy that is locked down certainly does not perform well. With that in mind, I do believe that the British pound is likely to continue going much lower, but that does not necessarily mean that we will get the occasional rally.
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