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

The British pound initially rally during the trading session on Monday to show signs of strength, but as you can see, we have pulled back quite drastically during the session to form a bit of a shooting star midday. The markets continue to see a lot of noisy behavior, but I think more importantly it shows just how strong the US dollar continues to be despite the fact that everybody is trying to sell it off.

GBP/USD Video 12.10.21

If we break down below the bottom of the candlestick during the trading session on Monday, then it is very likely that we see this market unwind. And quite frankly one thing that you should be noticing at this point in time that no matter how much they push against the greenback with the British pound, it simply cannot hang on to gains. The 200 day EMA is sitting just above the 1.37 level and sloping lower. Furthermore, the 50 day EMA is starting to reach below the 200 day EMA, so it is very possible that we see further downward pressure due to the “death cross” that is trying to form.

On the other hand, if we were to break above the 1.37 handle, that would be a strong sign but until we have that happen, it is very unlikely that I will get long of this pair. The market will have to look at this through the prism of the recent break down below the descending triangle, and now it looks as if we are simply trying to retest that bottom. To the downside, the market is likely to go looking towards the 1.35 handle as we continue to see exhaustion.

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