GBP/USD Price Forecast – British pound testing support

The British pound pulled back a little bit during the trading session on Monday to kick off the week, but it does seem as if there is a certain amount of support just below. Because of this, it’s likely that we could see value hunters coming back into the market rather soon.
Christopher Lewis
GBP/USD daily chart, February 05, 2019

The British pound pulled back slightly to kick off the week on Monday, as we continue to hang around the 1.3050 level. Beyond that, we have the 200 day EMA sitting just below and turning higher. This is a longer-term bullish signal, and trend traders will of course follow this. Now that we are pulling back towards that EMA, a lot of people that missed this move will be looking to take advantage of value. I think that the British pound breaking above the 200 day EMA has caught a lot of people off guard, and it makes sense that people will be looking to get on the right side of the market.

GBP/USD Video 05.02.19

The downtrend line and the 1.30 level also offer support, so I think given enough time the buyers will overwhelm the market again. Quite frankly all we need is some type of good news coming out of the United Kingdom or perhaps Parliament. Beyond that, the 50 day EMA, pictured in red on the chart, looks as if it is going to try to cross the 200 day EMA which is known as the “golden cross”, a very bullish technical signal longer-term. It’s very likely that we have seen the bottom of the market, and with the Federal Reserve suddenly sounding more dovish, really all we are going to need is a little bit of good news out of the UK to send this one higher.

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