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GBP/USD Price Forecast – British Pound Pulls Back Heading Jackson Hole Statement

By:
Christopher Lewis
Published: Aug 26, 2021, 14:01 UTC

The British pound has pulled back a bit against the US dollar during the trading session on Thursday, as it looks like we are trying to hang around the 200 day EMA.

GBP/USD Price Forecast – British Pound Pulls Back Heading Jackson Hole Statement

In this article:

The British pound has initially fallen during the trading session on Thursday as it looks like we are heading back towards the 1.37 handle, an area that has been important more than once. Furthermore, the 200 day EMA is sitting at this same general vicinity as well, so I think it does make a very interesting place to be. When you look at the chart, it certainly seems as if it is struggling overall, as we have been forming a bit of a “topping pattern” for a while, and now it looks like pressure could be on the buyers again.

GBP/USD Video 27.08.21

We had recently made a big “double bottom”, and if we were to break down below it near the 1.36 handle, then it is likely that we could unwind quite significantly, perhaps sending this market to the 1.35 handle, and breaking down below that opens up a bit of a “trapdoor” to much lower pricing. At this point, it certainly looks as if we are trying to make that happen over the longer term. There have been quite a few Federal Reserve members sounding much more hawkish than previous, and that could be part of what point out here.

Obviously, the Jackson Hole statement will have a lot to do with where we go next, so pay close attention to that. If the Federal Reserve does in fact start talking about tapering towards the end of the year, that will almost certainly strengthen the US dollar and we could see a huge turnaround. On the other hand, if they continue to sound dovish it is very likely that we will bounce. Between now and then, it is all noise.

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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