GBP/USD Price Forecast – British Pound Rallies Again

The British pound has rallied significantly during the trading session on Tuesday again, but quite frankly the British pound has a lot of concerns out there as the Brexit situation continues to get more and more tense, and of course there is the possibility that the European Union decides to sue the United Kingdom, although at this point I am not exactly sure what that would accomplish. The 1.30 level above obviously will be technical resistance, but it is worth noting that the market has bounced from the 200 day EMA, which is probably the very least it needed to do in order to show some type of resiliency.

GBP/USD Video 16.09.20

To the downside, if we were to break down below the 200 day EMA, it is very likely that the market breaks down to the 1.25 handle. Ultimately, this is a market that will continue to be driven by the occasional tweet, rumor, or headline. In other words, you cannot really trust anything for very long. Sooner or later, we will get a bit of clarity when it comes to Brexit but then again, I could have said that three years ago. With that in mind, it is very likely that we will continue to see a lot of nonsensical trading and sudden flashes in both directions. With that in mind, the most important thing you should do is pay attention to your position size, as it can get you hurt rather quickly. If we were to recover and take out the 1.30 level to the upside on a daily close, it would be completely different.

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