GBP/USD Price Forecast – Pound runs into brick wall

The British pound has broken down during a majority of the trading session on Wednesday as the 1.25 level has found plenty of sellers due to not only the large, round, psychologically significant figure but also the 38.2% Fibonacci retracement level. With that in mind it makes quite a bit of sense that we would find that trouble, the fact that this is an outsized type of negative candle stick suggests that perhaps we are going to break down a bit.

GBP/USD Video 26.09.19

On the other side of the equation though there is the 50 day EMA just below that should offer a significant amount of support, perhaps giving you an opportunity for a trigger, because a breakdown below that level on a daily close would of course be very negative in general. Otherwise, it’s very likely that we are going to continue to go back and forth, reaching between the 1.2350 level and the 1.25 handle. All things been equal though, this is a market that probably finds some type of answer relatively soon.

All of that being said, I believe that it is probably only a matter time before something bad comes out of the United Kingdom, because that’s the one constant that we have seen over the last several months. With that in mind, I believe it’s more than likely going to be a market that breaks down longer term than anything else. The 200 day EMA is just above the recent highs, so that would have to be cleared in order for me to become bullish suddenly.

Please let us know what you think in the comments below