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

The British pound initially tried to rally during the course of the trading session on Monday but gave back gains rather quickly. By doing so, it looks as if we are trying to poke below the 50 day EMA, and therefore send this market even lower. It is interesting to see that this market cannot seem to break above the 1.40 handle, which is an area that has a lot of psychology attached to it, and of course is an area that has pushed the market back and forth a couple of different times over the last several years.

GBP/USD Video 03.08.21

If we do break down below the 50 day EMA, it is likely that we could drop towards the 1.37 handle. The 1.37 handle is an area where we have the 200 day EMA as well, which of course is a longer-term technical indicator that people will pay attention to determine the trend. On the other hand, if we were to break above the 1.40 handle, the market could go looking towards 1.42 level, which is an area that the market has not been able to break above for ages.

I do not see this happening very easily though, and I think we are much more likely to see this market pullback more than anything else. If we do break down below the 1.37 level, then it is likely that we could go looking towards the 1.35 handle underneath. Regardless, I believe that the US dollar is oversold, and we are starting to see a little bit of balance in multiple markets.

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