GBP/USD Price Forecast – British Pound Stuck Between Two Moving Averages

The British pound went back and forth during the trading session on Wednesday, but then found the 50 day EMA to be interesting enough for buyers to jump in and take advantage of as support. Ultimately, the market has been all over the place as of late, which makes sense when you consider how many questions there are involving the British economy and of course the entire Brexit mess. Ultimately, I think that the market probably finds a reason to break in one direction or the other, and right now I suspect that downward pressure is probably going to be crucial. When you look at the longer term zoom out, you could make an argument for the attempt of a rising wedge, although I do not know that it is quite a tradable thesis at the moment.

GBP/USD Video 25.06.20

The British pound has been stuck between a couple of moving averages for the last two days, namely the 50 day EMA and the 200 day EMA. Looking at this chart, the 200 day EMA is starting to slope a little bit lower but at the same time the 50 day EMA is trying to turn higher after flattening out. In other words, we are going to see a collision of pressures.

With all of that in mind, I think that the market could rise a bit, but I am still somewhat bearish. I do not like the idea of owning the British pound due to the fact that we have so many moving pieces around the world when it comes to the global growth situation, and there are a lot of people out there that believe we are starting to see the beginning of the US dollar shortage due to the debt markets. If that is going to be the case, then it is going to be difficult to short the US dollar in general. This is essentially what the Federal Reserve is trying to keep from being an issue, by flooding the market with US dollars.

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