GBP/USD Price Forecast – British Pound Spikes

The British pound has spiked during trading on Monday as everybody ran from the US dollar. One of the biggest drivers of this could be the fact that the Federal Reserve is one of the few central banks in the world with any serious room to move on interest rates, and people are pricing in more cuts. At this point though, one would have to think that it’s only a matter of time before we see some type of pullback from what has been a parabolic move over the last couple of weeks. At this point in time, the market is very likely to see a return to the 50 day EMA, but if we were to continue to go higher, and break above the highs of the trading session on Monday could send this market much higher, perhaps reaching towards the 1.35 handle.

GBP/USD Video 10.03.20

The US dollar will continue to suffer at the hands of the idea that the Federal Reserve can cut another 100 basis points rather quickly, and I believe at this point Forex traders are banking on that happening. That being said, in these types of situations the risk appetite and general thought process is a bit of a moving target, and as soon as people are concerned about other economies, and after the Federal Reserve cuts rates, it’s very likely that we will see a return to dollar strength. In the short term though, this is going to be very difficult trading conditions, so keep your position size very small.