GBP/USD Price Forecast – British pound pulls back on Monday

The British pound has been somewhat all over the place as of late, as we continue to see a lot of noise but quite frankly I think what’s interesting here is that we will continue to see a lot of volatility as Boris Johnson makes his presence known in the next negotiation with the European Union. I think at this point, the British pound is teetering but at any hint of a resolution or some type of deal, the British pound explodes to the upside. Clearly, the entire market is on one side of the trade so the pain trade is most certainly to the upside.

GBP/USD Video 27.08.19

That being said, I don’t see any realistic agreement coming anytime soon. As long as that’s going to be the case, then I think what we’re looking at is an opportunity to short this market. The 50 day EMA is just above and that could cause resistance as well, so keep that in mind. I like the idea of looking for exhaustion to take advantage of, because it has worked for so long one would have to think a lot of traders are simply conditioned to do that. To the downside, I recognize that the 1.20 level of course is an area that is catching a lot of attention, as it is a whole number. We have bounced quite significantly from there, so don’t be surprised at all to see that tested again as traders tend to look for these areas to break down in order to kick off the next leg.

Please let us know what you think in the comments below