GBP/USD Price Forecast – British Pound Pulls Back to 50 Day EMAThe British pound has pulled back significantly during the course of the session on Tuesday but still sees quite a bit of support underneath.
The British pound has fallen a bit during the course of the trading session on Tuesday to reach down towards the 50 day EMA. Beyond that we also have a double bottom underneath that could come back into the picture, giving buyers a reason to look for support. If we were to break down below there, then it is possible that we could go down to the 200 day EMA which is closer to the 1.35 level. At that point, then you are talking about a trend defining point, and if we were to break down below there, we would have to see some type of flush lower that could send this market towards the 1.30 level.
GBP/USD Video 05.05.21
On the other hand, if we continue to see buyers on these dips, I anticipate we probably do not have much further to go to the downside before we continue to build up positive pressure to go looking towards 1.40 level above, which of course has been a massive barrier as you can see. If we can break above there, then the British pound is likely to go looking towards the 1.42 handle above which has been significant resistance, and I think what we are looking at in that general vicinity is the gateway to reach towards the 1.45 handle. Ultimately, it is likely that we will continue to see a push higher, due to the fact that most people are betting on the “reopening trade”, which generally means that the US dollar will probably continue to drop. That being said, in the short term it looks like we are simply chopping around and building up inertia.
Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
For a look at all of today’s economic events, check out our economic calendar.