GBP/USD Price Forecast – British Pound Showing Stability

The British pound has pulled back a bit during the trading session on Wednesday, before bouncing to show signs of resiliency yet again. The 200 day EMA currently sits below the 50% Fibonacci retracement level so it is very possible that we rally from here, but it won’t be an easy move to say the least. The gap lower that kicked off the week as been filled and it looks as if the British pound is trying to take it out, perhaps driving to the top of the Friday candlestick which is closer to the 1.29 handle.

GBP/USD Video 05.03.20

The 50 day EMA is starting to tilt lower, showing signs of shorter-term momentum shifting to the downside yet again. That being said though, I think it probably serves more as a target at this point as technical traders tend to like the 200 day EMA for a trend defining signal. If we do break down below the 200 day EMA, then I believe the market goes looking towards the 1.2550 level, perhaps down to the 1.25 handle as it will be a big magnet for price and certainly an area that has been important more than once. Ultimately, I think that the market will find a bottom sooner or later, but it should be noted that the Bank of England still hasn’t cut rates and it is anticipated that central banks around the world are all going to take various measures to lift the global economy. There could be a bit of a shock in this pair but after the Federal Reserve dropped its interest rate by 50 basis points, it’s probably a relative play at this point to the upside.