GBP/USD Price Forecast – British Pound Plunges After Boris Comments

The British pound has fallen hard against the US dollar during the trading session on Friday as both the United Kingdom and the European Union have made comments that a no deal outcome is more likely than not at this point. If that is going to be the case, then obviously the British pound needs to be revalued against most currencies. I anticipate that this market will probably go plunging towards the 1.30 level, but at the end of the day it seems as if the British pound always has another lifeline just waiting. However, we are getting close to the end here and with each disappointment there is likely further reaction.

GBP/USD Video 14.12.20

The size of the candlestick and the fact that we are comfortably below the 50 day EMA suggests that we probably have more momentum to the downside going forward. At this point in time, the British pound is going to be toxic and it makes sense that we broke down as people will not want to be holding the pound into the weekend in case even uglier headlines come out. After all, if you wanted to pick the British pound up “on the cheap”, you probably will have a chance to do so on Monday so it makes perfect sense that we would be avoiding it. The 200 day EMA sits just below the 1.30 level so it is likely to offer a bit of support at that large figure as well.

With this being the case, I like the idea of perhaps stepping on the sidelines in the short term and reassessing everything at the end of the Monday session. Do not worry about missing anything, it is likely that we are about to see a rather big move in one direction or the other.

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