GBP/USD Price Forecast – British Pound Volatile For Wednesday Session

The British pound initially tried to rally during the trading session on Wednesday but pulled back from the 50 day EMA as an ill-timed tweet suggested that the EU is going to take direct action against the City of London when it came to the MiFID rewrite. Ultimately though, this is probably more or less going to be machine driven trading so it’s a bit difficult to assess whether or not there is anything to this. At this point, the British pound is being manipulated through twitter again, so it is probably best to step away until things come back down. All things being equal though, I do prefer the upside as machine trading calms down.

GBP/USD  Video 06.02.20

To the upside, the market does break above the 50 day EMA then it’s very likely to go looking towards 1.32 level again, and then possibly the 1.35 handle. The longer-term technical analysis hasn’t changed much but it’s clear that you can’t trust the markets with too much of your trading capital as algorithmic trading has hijacked the British pound more than once. Typically, these type of selloffs tend to be short-lived, as the adults come back to start trading. If the market does break down below the 1.2950 level though, it is possible that we could see more of a protracted selloff down towards the 1.28 handle, and then eventually the 1.27 level. The 200 day EMA of course will have its own influence on the markets, but it should be noted that the same thing happened during the previous session, only to see the buyers return again.

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