GBP/USD Price Forecast – British Pound Tests 50 Day EMA

The British pound rallied a bit during the trading session on Thursday, reaching towards the 50 day EMA before pulling back to form a bit of a week looking candlestick. That being said, the market has been making a series a “lower highs” as of late, which suggests that we are forming a new downtrend, at least in the immediate future. That being said, if we can break above the 50 day EMA it might be a relatively positive sign, and therefore I would have to consider that the market may go looking towards the 200 day EMA above, colored in black.

GBP/USD Video 26.06.20

The Brexit of course remains a major issue with the British pound, as we are not really sure how that is going to play out yet. For some traders, the base case scenario is a “hard Brexit”, and I think the prospect of that happening is not as scary as it once was, but it probably would still have somewhat of a negative reaction in the market. The market breaking down below the lows of the Tuesday candlestick could open up a move down to the 1.2250 level, which is an area that has been important more than once looking back. To the upside, if we were to break above the 200 day EMA then the 1.25 level would be the next obvious and logical target to be tested. Expect choppy volatility, because quite frankly most of the Forex markets look like they do not have anywhere to be right now.

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