GBP/USD Price Forecast – British Pound Looking Towards 200 Day EMA

The British pound has gotten hammered during the trading session on Tuesday as we continue to see more of a “risk off” type of attitude out there, and with that being the case it is not a huge surprise to see that the British pound may go looking towards the 200 day EMA. The 200 day EMA currently sits just above the 1.37 level, and as a result that should be a very strong support level. If we were to break down below that level, then we will go plunging towards the 1.35 handle.

GBP/USD Video 18.08.21

The 1.35 handle course is a major support level on longer-term charts, so if we were to break down below that level the British pound would certainly change overall trends and go plunging much lower. While that is not my base case scenario, it is something that we need to keep an eye on. On the other hand, if we turn around and break above the 50 day EMA, then we may have the ability to go towards the 1.40 handle above, which has a lot of psychology attached to it, and of course has been resistance. That being said, there is nothing on this chart that suggests that we need to worry about 1.40 anytime soon.

This is more about the US dollar than anything else, as there is a general “risk off” attitude out there that traders are starting to express, as the greenback is picking up strength against almost everything. With this being the case, I would be a seller of short-term rallies that show signs of exhaustion.

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