GBP/USD Price Forecast – British Pound Gaps Lower on Monday

The British pound has gapped lower to kick off the week and test the 50 day EMA. The 50 day EMA is of course technical support and therefore I think a lot of traders are trading off of it. That being said, I think at this point the British pound is probably trying to at least kill time, if not perhaps pull back a bit in order to find even more support underneath. The 1.35 level would be a major support level that people will be paying attention to as well, so at this point in time the market is likely to see buyers jumping into that place as well.

GBP/USD Video 23.03.21

All things being equal, the British pound has been one of the better performing currencies out there but pay close attention to those yields coming out of the United States, because if they continue to climb, that could cause some problems in this market. Granted, I do believe that the British pound will eventually continue to go higher, but a significant pullback could be in the works.

The 1.42 level above has been a major resistance barrier on the weekly timeframe, which as you can see was the recent highs. That is the target for buyers to get to, but we have a lot of noise between here and the 1.40 level to get beyond before that can actually happen. In the short term, I think we probably continue to see a lot of negativity but in a more range bound fashion. I would not be a huge in my trading position until we get a little bit of clarity.

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