GBP/USD Price Forecast – Pound Continues to Hang About 50 Day EMA

The British pound has initially rallied towards the 50 day EMA on Wednesday as we continue to hang about that indicator and see it offer resistance. This could perhaps send a little bit more negativity into the market and US dollar strength, which is what I anticipate happening. That being said, the market is likely to see plenty of support near the 1.35 handle underneath. In general, this is an area that should be massive noise in a 250 point range.

GBP/USD Video 01.04.21

On the other hand, if we turn around a break above the highs of the trading session on Monday, it will open up the possibility of a move towards the 1.40 level. That is an area that has been resistance more than once, so I think that if we can break above there then the market is probably going to go looking towards 1.42 handle again, an area where we had seen a lot of pressure.

At this point, I think that this is a market that is still in the middle of a correction, but that is a keyword here: “correction.” I think that eventually the British pound does turn around and take off, but we need to stabilize quite a bit in the short term. At this point in time, the market is likely to see a bit of negativity due to the fact that the US dollar is strong, but the British pound is probably a second contender for strength at this point as the UK economy continues to look likely to open up a rather soon. Nonetheless, I think you probably have sloppy trading in the short term before we finally recover.

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