GBP/USD Price Forecast – British Pound Gapped Lower to Kick Off The Week

The British pound has gapped lower to kick off the trading session on Monday, rally from there, and then pulled back as Bank of England members are now suggesting that a rate cut is possible. Having said that though, the Federal Reserve also looks likely to cut rates to fight the economic damage done by the coronavirus, so therefore it’s very likely that we continue to see a lot of noisy trading to say the least and it will be very choppy. The 50% Fibonacci retracement level is just below, so there is a certain amount of technical support, not to mention the fact that the 200 day EMA is just below there.

With that, I would anticipate that a bounce makes sense, unless of course the Bank of England actually does something to act, or if the Federal Reserve walks back Jerome Powell’s statement later on Friday. Neither looks very likely, so at this point this is going to be a very choppy and volatile pair but could very well find itself rallying just due to the fact that it had sold off so much recently.

GBP/USD Video 03.03.20

If the market was to break down below the 200 day EMA though, things change in the market could go looking towards the 1.25 level given enough time. Underneath there, the pair collapses and goes much lower. Ultimately, I think we are probably looking at a range bound move until we get some type of impulsive candlestick that we can follow. Until then, this is going to be very difficult pair to trade in my estimation.