GBP/USD Price Forecast – British Pound Continues Consolidation

The British pound has rallied a bit during the trading session on Tuesday but remains in the same consolidation area that it has been in for the past week or so. That being said, the market is likely to continue seeing a lot of noisy behavior between now and Friday when the jobs number comes out. The 50 day EMA underneath is of course going to offer a little bit of support, but if we were to break down below there then it is likely that we continue to go much lower, perhaps testing that 200 day EMA again. I think a lot of this will continue to be based upon the US dollar more than anything else.

GBP/USD Video 04.08.21

Pay close attention to the bond market, as it will give us a bit of a “heads up” as to where the US dollar may go. After all, if there is more demand for greenbacks if the bond market starts to pick up again. That being the case, it would also be thought of as a rush towards safety, which has people leaving the British pound in general. On the other hand, if we were to turn around a breakout above the 1.40 handle, then the market is likely to go looking towards the 1.42 handle, which of course is an area where we have seen a massive amount of resistance in the past.

All things been equal, this is a market that I think will continue to struggle, at least to break out above that level. It is worth noting that the market continues to fail at the 1.40 handle, so as long as we stay below there I am looking to fade short-term rallies.

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