GBP/USD Price Forecast – British Pound Recovers After Initial Selling
The British pound initially fell towards the 1.37 level before turning around to form signs of strength again. Ultimately, the market is trying to strengthen itself but there is quite a bit of resistance just above. With that being the case, the market is likely to see the 50 day EMA above as resistance, and of course all of that noise between here and there. To the downside, the 200 day EMA is reaching towards the 1.37 level, which also makes it supportive. At this point in time, I think the most likely course of action is a lot of choppy and volatility noise ahead.
GBP/USD Video 26.07.21
Keep in mind that the US dollar is being thrown around by the 10 year yield to right now, so it will be interesting to see how that enters the fray. Right now, it looks as if the fears that traders had just a few days ago are starting to abate, and therefore we have seen a little bit of a push higher, but when you look at the longer timeframe, you can see that we have been slumping lower so I do believe that the next couple of weeks will be crucial, and we should get a bit more clarity then.
Breaking back down below the 200 day EMA opens up the possibility of reaching down towards the 1.35 level, and then perhaps breaking down below there so that we could completely fall apart. That obviously would have a rush of money flowing into the bond market to get back to safety. On the other hand, if we do break above the 50 day EMA it is likely that the market could build up enough momentum to go higher, perhaps reaching towards the 1.40 handle.
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