GBP/USD Price Forecast – British pound rallies after court decision

The British pound has rallied a bit during the trading session on Tuesday as the market reacted to the court decision, which could throw a wrench into the idea of a “no deal Brexit.” The biggest problem of course is that we have seen this movie before, and quite frankly it just shows how fractured and difficult the British Parliament situation is going to be. While we have had a nice little bounce on short-term charts, the reality is that there hasn’t been much in the way of confidence building as of late, and even this bounce has been somewhat underwhelming. Because of this, it’s very likely that we will continue to see negative pressure from a longer-term standpoint until we get a bit of clarity, something that is desperately needed right now.

GBP/USD Video 25.09.19

To the downside, the 50 day EMA is painted in red and it could offer a certain amount of support. Just above, the black 200 day EMA should offer a significant amount of resistance as well, then of course the 1.25 area is a certain amount of psychological resistance in and of itself. With that being the case, I think it’s only a matter time before this market rolls over. The 1.20 level underneath would be the longer-term target, but obviously we need some type of negativity to kickoff that move. Quite frankly, that’s not asking much out of the British Parliament or politicians in general. Even though it’s been a somewhat positive day, it hasn’t exactly been overwhelming.

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