GBP/USD Price Forecast – British Pound Struggles a Bit After Early Rally

The British pound initially rally during the trading session on Wednesday to reach towards the 1.24 level again but by the time New York came on board it did start to pull back slightly. That being said, the market continues to see a lot of negativity out there in general when it comes to anything that is not that the US dollar or the Japanese yen. The British are likely to be locked down for the foreseeable future, while the United States is trying to get back to work. Politics aside and whether or not it is a good idea as well, the truth is that the United States is going to get to work quicker than the United Kingdom.

GBP/USD Video 23.04.20

Furthermore, there are a lot of concerns out there when it comes to Brexit and the effect on the British economy in the near term. While Brexit has taken a backseat, the reality is that once everything comes out, we need to get back to that argument. In other words, the British pound is probably going to continue to be a bit of a laggard in general, and therefore it makes no sense to bet against the US dollar while the US Treasury markets are on fire. Yes, the market will occasionally rally, but those look to me to be selling opportunities as the 1.25 level has shown itself to be so massively resistive. The 200 day EMA above pushed the market back down, so it is not until we break above there that I would feel confident about going long again.