GBP/USD Price Forecast – British Pound Racing Higher

The British pound rallied significantly during the trading session on Tuesday, reaching towards the 50 day EMA. At this point, the market is likely to continue reaching towards the 200 day EMA next, which is a little closer to the 1.27 level. Short-term pullback should continue to offer buying opportunities, as we see plenty of buying pressure as the US dollar is on its back foot. There seems to be a lot of attention paid to the fact that the Federal Reserve is flooding the markets with liquidity, and therefore that should in theory weigh against the US dollar overall over the longer term.

GBP/USD Video 15.04.20

We have broken above the 61.8% Fibonacci retracement level which is typically a very positive sign for continuation as well, although in these times it is a bit difficult to get overly “definite” on a particular viewpoint. Simply put, I am simply following price action at this point which looks to be somewhat hell-bent on going to the upside. That being said, the market was to turn around a break down below the 1.25 handle, the market could break down somewhat significantly, reaching back towards the 1.2250 level.

I believe at this point this is all about the US dollar, and less about the British pound. Overall, people are paying attention to what the Federal Reserve is doing more than anything else and it’s likely that we are going to continue to see the US dollar a bit rocky. However, with the host of negative headlines that seem to be just waiting out there to ruin the party, I do believe that we will eventually see a break down again.