GBP/USD Weekly Price Forecast – British Pound Looks Heavy Yet Again

The British pound initially tried to rally during the week but found the 50 week EMA to be a bit too much to overcome. At this point, the market started to sell off and then of course the Bank of England talking about expanding quantitative easing even further did not help the situation. It is expected that they will do even more in August, and although they are not quite ready to go negative with interest rates, there is still the possibility of that happening in the future.

GBP/USD Video 22.06.20

The shape of the candlestick is not quite a shooting star, but it does suggest the same thing. With that being the case, it is highly likely that we will continue to see a lot of volatility and downward pressure, so I like fading short-term rallies, using this weekly chart as a bit of a guide for future trading. I think at this point it is likely we go looking towards the 1.2250 level underneath, and then possibly even the 1.20 level given enough time.

The British pound will have to deal with all of that noise coming out of the Bank of England, but you should also keep in mind that the price action that we have seen does not even address the idea of the messy Brexit that is almost guaranteed at this point. Quite frankly, I just do not see how the British pound rallies significantly from here, and I do suspect that the rallies will be sold into when they do happen.

For a look at all of today’s economic events, check out our economic calendar.