GBP/USD Price Forecast – British Pound Plunges Again

The British pound fell yet again during the trading session on Wednesday, as we continue to see a lot of volatility in Sterling. At this point, we are trying to bounce a bit but at the end of the day we have decidedly broken below the 1.30 level, and that should open up the possibility of the market going much lower. In fact, the next major support level is probably found somewhere around the 1.2750 level, so that is where I think the buyers will show up in full force.

GBP/USD Video 10.09.20

With the United Kingdom threatening to leave the European Union without a deal again, and of course the fact that they are shutting down their economy from having more than six people in one space should continue to loosen the desirability of owning the British pound. Quite frankly, that is probably going to work out in the favor of the British, as it makes their imports cheaper. Remember, they need to come up with some type of scenario where buying British exports makes sense for the rest of the world.

Granted, they are putting deal together with other countries, but at this point in time a devalued British pound is not necessarily the worst thing that could happen to them. With that being the case, I do think that we probably have further to go to the downside but recognize it may be volatile and choppy at times, just as it has been for the last couple of years.

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