GBP/USD Price Forecast – British Pound Pulls Back Towards 200 Day EMA

The British pound has pulled back a bit during the trading session on Tuesday, reaching towards the 200 day EMA before bouncing a bit. By doing so, the market looks likely to continue to see interest in this area, as the 1.2635 level was significant resistance in the past, and now should in theory be support, especially as the 200 day EMA is just below. Looking at this chart, it is easy to see that there is resistance at the 1.2750 level, where we pull back from early during the day. If we can clear that level, then the market is highly likely to go looking towards the 1.30 level, which is a major large figure as well.

GBP/USD Video 10.06.20

With the Federal Reserve having a meeting over the next two days, it is highly likely that we are going to continue to see relatively choppy trading, as the market awaits Jerome Powell and his statement. If it is dovish enough, that will send the British pound higher, but if it is suddenly optimistic about the US economy, that might spook traders into buying the US dollar again. I believe in the next 48 hours we are going to make a decision that could have ramifications into the future. Because of this, it is important to be patient because you will get a longer-term trade presenting itself sooner rather than later. The next 24 hours might be relatively quiet, followed by a sudden burst in one direction or the other, depending on how the market sees the outlook by the Fed.

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