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GBP/USD Price Forecast – British Pound Pulls Back Again

By:
Christopher Lewis
Published: Oct 20, 2020, 13:27 UTC

The British pound rallied a bit initially to show signs of strength on Tuesday, but then rolled over a bit.

GBP/USD

In this article:

The British pound initially rally during the trading session on Tuesday, reaching towards the 1.30 level which of course is a very significant large, round, psychologically significant figure. This large number has caused quite a bit of resistance so at this point it is not a huge surprise to see that we have pulled back a bit. Between the 1.30 and the 1.31 levels, there seems to be a significant amount of selling pressure. To the downside, the market continues to look at the 1.28 level as potential support, as well as the 1.2750 level. Just below there, we have the 200 day EMA which of course is very important to pay attention to.

GBP/USD Video 21.10.20

To the upside, if we were to somehow break above the 1.31 handle, then the British pound will more than likely go looking towards 1.33 level followed by the 1.34 handle. That being said, it would take some type of good news when it comes to Brexit or some other such event. Another possible driver of that move could be the stimulus package in the United States actually being shoved through, but at this point it is still difficult to understand exactly what it is that Congress can do between now and the election.

All things being equal, when you look at this chart it does appear that we are running into a significant amount of resistance that we could very easily find this market breaking back down. Regardless of what you choose or see, you need to keep your position relatively small.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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