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GBP/USD Price Forecast – Reddish Pound Breaks Down A Bit

The British pound broke down a bit during the trading session on Wednesday, slicing through the 1.30 level. Quite frankly though, the British pound has done fairly well against other currencies, so I believe that this is more or less a story about the US dollar more than anything else.
Christopher Lewis
GBP/CAD

The British pound has initially broken above the 1.30 level, but then broke down below there for the session on Wednesday. Ultimately, the market is falling, but probably reflects the US dollar more than anything else. The British pound has done fairly well against other currencies so at this point it’s likely that although we are drifting lower here, if you are looking to play the British pound to the upside, you should probably do so against other currencies such as the Australian dollar. Ultimately, this is a market that is struggling a bit, but I do think that there is a significant amount of support underneath that should offer plenty of fight.

GBP/USD Video 20.02.20

If the market was to break above the 50 day EMA which is painted in red on the chart, then the market will probably go looking towards 1.32 handle. If you are looking to short the British pound, this probably isn’t the place to do it as there is so much in the way of noise just below. Ultimately though, the market is very noisy and of course very difficult to trade at this point as the US dollar is by far one of the strongest currencies around the world, despite the fact that inflation numbers coming out of the United Kingdom were better than anticipated. All things being equal though, the US numbers continue to be better than the rest of the world so it’s likely that the greenback continues to strengthen a bit here, but I don’t think that it breaks down the pair.

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