GBP/USD Price Forecast – British Pound Continues to Show Hesitation

The British pound has been all over the place during the trading session on Tuesday, as it looks like we are struggling to find some type of footing. Because of this, I believe that the British pound is going to continue to struggle, especially as traders are starting to believe that the Bank of England is going to tighten into a recession, which of course means that the economy will probably slow down. With that being the case, if we break down below the bottom of the candlestick for the trading session on Tuesday, then it is likely that we could go looking towards 1.35 handle. The 1.35 handle of course is a large, round, psychologically significant figure, and could cause a little bit of support. However, breaking down below that level could open up a move down to the 1.34 handle.

GBP/USD Video 13.10.21

If we were to break down below there, then the market is likely to continue going much lower, and the fact that we are getting ready to form the so-called “death cross” where the 50 day EMA is ready to break down below the 200 day EMA, and a lot of longer-term traders look at that as a signal to start shorting again. If that is going to be the case, then I think it only adds more downward pressure to a market that has already been struggling to recover. Furthermore, it does not take much in the way of imagination to see that we had recently broken down below a descending triangle, and other words that we are more than likely going to anticipate seeing resistance in this area anyway.

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