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GBP/USD Price Forecast – British Pound Slices Through 200 Day EMA

By:
Christopher Lewis
Published: Sep 20, 2021, 14:28 UTC

The British pound has sliced through the 200 day EMA quite dramatically during the session on Monday as there has been a general “risk off” attitude around the world.

GBP/USD Price Forecast – British Pound Slices Through 200 Day EMA

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The British pound has gotten hammered during the trading session on Monday, as there was a general “risk off” attitude around the world. Credit contagion issues in China are starting to take front and center with the headlines, and one would not be surprised at all to see the US dollar be a big winner as traders try to get back into bonds for safety. Furthermore, there will be a flood of money coming out of emerging markets, so that in and of itself will help the greenback.

GBP/USD Video 21.09.21

The fact that we sliced through the 200 day EMA and the 1.37 level at the same time suggests there is quite a bit of significant selling pressure, and therefore we could go looking towards the 1.36 handle. The 1.36 handle has been crucial for keeping the market somewhat afloat, and if we were to break down through that level, then I think it opens up a new flood of selling as it will almost certainly kick off a lot of stop losses. At that point, I would not surprise me at all to see this entire trend change again to reach much lower.

Alternately, if we turn around and recapture the 200 day EMA then I would not be surprised to see this market go looking towards the 50 day EMA above, an area that has offered a significant amount of resistance in the past. In other words, we are either going to break down or we are going to bounce back into the same consolidation. That being said, you probably need to pay attention to the fact that we have been drifting lower in general over the last several months.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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