GBP/USD Price Forecast – British pound stabilizes on Monday

The British pound initially dipped a bit during the Monday session, testing the 1.2850 level. The 50 day EMA is just below, pictured in red on the chart, turning to the upside. That being said, the 200 day EMA is just above pictured in black and is still sloping lower. At this point, the market looks likely to continue to gyrate in this area based upon the latest thoughts as to what’s going on with Brexit. At this point, I believe that the market will continue to chop around, as there is a lot of uncertainty on both sides of the issue. At this point, we also have the Federal Reserve sounding a bit more neutral as of late, so that does provide some bullish direction, but at the same time there are so many moving pieces that the British pound it’s difficult to own longer-term.

GBP/USD Video 22.01.19

The 1.27 level underneath is massive support, and I think if we were to rollover and a breakthrough of that level would be very negative. Ultimately, if we did drive down through there I think we would go to the 1.25 handle. If we do rally from here, I believe that if we can break above the 200 day EMA, the market could go towards the 1.32 handle. Nonetheless, this is probably a market that is going to be very dangerous to be involved with, but certainly we will get the explosive moves occasionally based upon headlines. Algorithmic trading continues to get full by Twitter headlines.