GBP/USD Price Forecast – British Pound Continues to Test Support Underneath

The British pound has gone back and forth during the course of the trading session on Monday as it looks like we are trying to figure out whether or not we have the momentum to continue going higher. The British pound is a little bit insulated against the greenback as the Bank of England is closer to tapering than a lot of other central banks. Furthermore, the market had gotten a little bit over stretched during the previous couple of weeks and now that we are dancing around the 50 day EMA, we may have to make a little bit of a bigger decision.

GBP/USD Video 10.08.21

If we break down below the lows of the trading session on Monday, then it is possible that we could go looking towards the 1.37 level underneath, which is near the 200 day EMA. The 200 day EMA of course is an indicator that will attract a lot of attention as it is a longer-term trading indicator. If we were to break down below there, then it is obviously a negative sign, and we could go looking towards the 1.35 handle. All things been equal, that would be a very negative sign.

On the other hand, if we were to somehow break above the 1.40 handle, then it is likely that the market could go looking towards the 1.42 handle above which is a major barrier that has been difficult to break over the last several years, so if we were to break above that then obviously it would be an extraordinarily bullish sign, perhaps opening up a “buy-and-hold” type of strategy at that juncture.

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