GBP/USD Price Forecast – British Pound Gives Up Early Gains

The British pound has initially tried to rally during the trading session on Monday to kick off the week, but quite frankly looks a bit tired at this point as the 50 day EMA continues to cause issues. The 1.39 level continues to cause issues in both directions, and as I record this it looks very likely that we continue to see very noisy behavior in this general vicinity. Because of this, I like the idea of being cautious about my position size, because I do think that we are starting to see a bit of a dynamic shift in the currency markets. It would not take much to convince me that perhaps the oversold condition of the US dollar may strengthen some of these other currencies, and the British pound would be a likely target due to the fact that it had rallied so quickly.

GBP/USD Video 29.06.21

If we were to break down below the most recent low, that could open up a serious challenge to the 1.37 handle where the 200 day EMA comes back into the picture. If we break down below there, then it is likely that we could go looking towards 1.35 handle. On the other hand, to the upside if we break above the 50 day EMA then it is very likely that we go looking towards the highs again, perhaps trying to break out above the 1.42 level finally. If we do, that could send this market much higher, probably another 300 pips or so. Keep in mind that this is a very noisy market but is a little extended from a longer-term standpoint.

For a look at all of today’s economic events, check out our economic calendar.