GBP/USD Price Forecast – British Pound Reaches Towards 1.37

The British pound has rallied during the session on Tuesday to reach towards 1.37 level, an area that has been important more than once. With that being the case, it does make a certain amount of sense that we have stalled here, especially considering that the 200 day EMA sits just above. The 200 day EMA of course is an indicator that a lot of people will acknowledge, so to think we sliced right through it is probably a bit much, but it should be noted that we have done exactly that a couple of times recently.

GBP/USD Video 22.09.21

The market has been winding itself up for a bigger move, and you could even make an argument for a bit of a symmetrical triangle. Now that we have fallen again, it suggests to me that the market could break down a bit, perhaps reaching towards the 1.35 handle. Breaking down below that level then opens up the floodgates for massive selling. It will be interesting to see if that happens, because it will be a huge “pro-US dollar” move and more than likely would have something to do with the “risk off move.”

The catalyst may be Evergrande, after all it is starting to attract a lot of attention and the Chinese credit situation has been a bit messy for a while. This has been a bit of a “open secret”, but it finally looks as if it is starting to enter the narrative. That being said, if we turn around a break above the 1.39 level, then the British pound will probably take out to the upside. That seems very unlikely these days though.

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