GBP/USD Price Forecast – British Pound Continues Recovery

The British pound has shown itself to be rather resilient during the trading session on Monday, as traders continue to pay close attention to the interest rates coming out of the United States and of course risk appetite in general. That being said, there are quite a few technical barriers above that could come into the picture. The first one of course would be the 1.37 level which had been massive resistance previously. Furthermore, we also have the 50 day EMA reaching down towards the 200 day EMA, which is a potential “death cross.”

GBP/USD Video 05.10.21

To the downside, I do believe that we could revisit the 1.35 handle, but we need to see some type of “risk off” type of attitude shift. At this point, I do not think that it would take too much to make that happen, but over the last couple of days we have in fact seen quite a significant recovery. For what it is worth, the 1.37 level above is rather resistive looking, and therefore I think it is difficult to imagine a scenario where we will simply slice through there.

If we did, that could open up a move towards 1.39 level, and breaking that of course could open up a much bigger move. I do not necessarily anticipate seeing that happen, but as things stand right now, the one thing that you can probably count on is a lot of volatility. There seems to be a lot of confusion, which of course makes volatility a major problem. I would be cautious with my position size, at least until we get some semblance of clarity.

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