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

The British pound has initially rallied during the trading session on Thursday but found enough selling pressure above the turn things back around and form a rather ugly candlestick. After all, the Bank of England failing to add more stimulus may have been short-term bullish, but they also kept the door open for more stimulus in June as needed. In fact, it is almost a given at this point so the British pound will more than likely continue to grind much lower over the longer term, and I believe at this point short-term rallies are to be sold into as we are more than likely going to go looking towards 1.22 handle underneath, which then leads to a much bigger move down to the 1.20 level.

GBP/USD Video 08.05.20

Looking at the overall picture of the chart, I do believe that the US dollar will continue to attract a lot of attention, because the uncertainty around the world certainly puts a lot of interest in the greenback, not the least of which will be in the treasury market. The 50 day EMA is starting to slope lower and has acted as dynamic resistance quite nicely, just as the 61.8% Fibonacci retracement level has come into play. Further bolstering the argument for the market to rollover is that the 1.25 level has found itself right at the 61.8% Fibonacci retracement level as well. In other words, technically and fundamentally this market should continue to go lower but that does not necessarily mean that it breaks down immediately. Look at rallies as an opportunity to pick up the US dollar “on the cheap.”