GBP/USD Price Forecast – British Pound Shoot Higher

The British pound has rallied significantly during the trading session on Thursday to break above the 50 day EMA again. However, the 1.3850 level continues to be a bit of a headache for traders, and therefore I think we will continue to see this market grind in this area. If we can break above the 1.39 level, then I think that you have a real argument for the British pound to rally.

GBP/USD Video 10.09.21

The size of the candlestick is relatively important, but most importantly the above that there was a hammer from the previous day that sat right at the 200 day EMA. We are still essentially stuck between the 200 day EMA and the region of the 50 day EMA, so you need to be very cautious. If we turn around a break down below the 200 day EMA though, this is a market that could be on the precipice of something bigger. At that point, I would anticipate that the market would go looking towards the 1.36 level where there is a bit of a “double bottom” that a lot of people are paying close attention to. A move below there would of course open up massive amounts of selling.

At this point, I believe that a lot of what we are looking at comes down to the US dollar and not necessarily the British pound itself. Because of this, it is very likely that you need to pay close attention to the US Dollar Index, as it will give you a bit of a heads up as to where we could go next.

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