GBP/USD Price Forecast – British Pound Gets HitThe British pound struggle to get above the 50 day EMA on Thursday, and then the MPC did very little to stoke the fires of British pound strength either.
The British pound has gotten hit during the trading session on Thursday, as the 50 day EMA has offered resistance, right along with the 1.30 level. The Monetary Policy Committee did very little to keep the markets positive on the British pound, and of course the large, round, psychologically significant figure had a lot to say as well. Because of this, it is likely that we will see an attempt to get back to the 200 day EMA, so I would look at short-term rallies with signs of exhaustion as a possible selling opportunity.
GBP/USD Video 18.09.20
In fact, it is not until we break above the 1.3050 level on a daily close that I would be a buyer of this pair. Quite frankly, the US dollar looks as if it is trying to strengthen against multiple currencies, and with the Brexit going on it makes quite a bit of sense that the US dollar would find the British pound an easy target. With that being the case, if we break down below the 200 day EMA it is likely that the 1.25 handle, and then possibly even lower.
There are a lot of concerns out there when it comes to the global economy, so that could have people running towards the safety of the US dollar anyway. If that is going to be the case, then the moves can be quite drastic. Furthermore, Brexit will continue to cause headlines that have a negative effect on the British pound occasionally. Unfortunately, they can come out of nowhere and therefore you need to be very cautious trading this pair in either direction.
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