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

The British pound rallied just a bit during the trading session on Thursday but gave back early gains as momentum has failed. Quite frankly, with the jobs number coming out on Friday, it is a bit much to expect that the market is going to make a huge move right now, but after the jobs number there will be a lot of speculation as to how rapidly the Federal Reserve will have to tighten monetary policy. This of course will have a major influence on what happens with the greenback, and therefore what happens with this pair. I suspect at this point in time we continue to see more downward pressure than anything else, but obviously we need to get through that major event to have clarity.

GBP/USD Video 08.10.21

One thing that has been relatively clear has been the fact that the British pound has been struggling in general. With this being the case, it would not surprise me at all to see this market slump towards the 1.35 handle, which of course is a large, round, psychologically significant figure. After that, the market is likely to see an attempt to break down below the recent lows.

After that, it opens up significant selling pressure. Quite frankly, after we had formed a couple of long and bearish impulsive candlesticks, for the market to continue going lower is probably the base case scenario. Beyond that, the 1.37 handle also features the 200 day EMA getting ready to be crossed by the 50 day EMA forming the “death cross.” I still favor shorting signs of weakness, but also recognize the next 24 hours could be rather erratic through the announcement.

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