GBP/USD Price Forecast – British Pound Gives Back Some of Friday’s Gains

The British pound has initially tried to rally during the day on Monday but gave back the gains pretty quickly as it looks like the market is trying to test that Friday candlestick. The Friday candlestick was a bit suspicious though because the time in almost simultaneously with the 10 year yield rising in the United States. It almost felt as if it was a bit of position squaring, so I am a bit suspicious about this massive candlestick. At this point, it certainly looks as if we may try to get to the bottom of it again.

GBP/USD Video 13.07.21

There are a lot of things to worry about in the world right now, not the least of which of course is the coronavirus variant, but there are also significant shortages of US dollars in the global financial system. Looking at this point, I think there are a lot of traders watching the 10 year yield, because it is the chart that seems to be dragging everything else right along with it. Underneath, I see the 1.37 level as massive support, as we also have the 200 day EMA sitting just below there and causing a lot of noise. With that, I think the market is likely to see a retest of this area, especially as we get the CPI number coming out of the United States.

In other words, there is a lot of noise coming and therefore one would have to think that we will probably continue to test this area underneath. To the upside, if we get a daily close above the red 50 day EMA, then I might be a buyer.

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