GBP/USD Price Forecast – British Pound Continues to Pressure Support

The British pound has initially rally during the trading session on Wednesday but gave back the gains to show signs of hesitation. This is not overly surprising, because we continue to test the 1.36 handle for support. This level being broken to the downside could end up being a very negative turn of events, perhaps opening up a huge move down to the 1.35 handle. If that does in fact happen, we could see an even bigger flush lower as it would be a huge move in favor of the greenback. I also suspect that we would see it across-the-board, showing signs of US dollar strength everywhere.

GBP/USD Video 23.09.21

On the other hand, if we can take out the 200 day EMA above, it could be a very bullish sign, but right now that does not look likely. Even if we did, then we have to worry about the 50 day EMA that is sloping lower in that general vicinity. In fact, it looks as if we are not too terribly far away from forming a bit of a “death cross”, which of course is a very negative sign. If that were to happen, it would obviously trigger a lot of longer-term selling.

If we get a general “risk off attitude” in the markets, that probably weighs upon the British pound as well, or perhaps put a little bit more specifically, weighs in favor of the greenback. That being said, I think we have a huge fight on our hands, and this is a chart that is almost certainly going to be worth watching. Also worth noting is that the pound is starting to slump against other currencies.

For a look at all of today’s economic events, check out our economic calendar.