GBP/USD Price Forecast – British Pound Continues to Grind
The British pound rallied slightly during the trading session on Tuesday, as we continue to see more of a grind in general. Looking at this chart, it appears to me that we are trying to form some type of the down trending channel, and of course with the 50 day EMA above, you can also make an argument for that coming into the picture as well. Underneath, the 1.2750 level continues to be rather supportive as the 200 day EMA sits there and it is an area where we have seen quite a bit of choppy behavior over the longer term.
GBP/USD Video 30.09.20
As far as buying the British pound is concerned, I do not really have any interest in doing so until we get a daily close above 1.30 at the least. Yes, I realize that is quite a distance from here, but the reality is that the market has fallen apart, and it suggests to me that we have further to go. Beyond that, you have the Brexit situation still causing major problems and of course the United Kingdom is talking about locking down parts of the economy, something that cannot be very good for economic outlook.
All that being the case, we also have to worry about a “risk off” situation, and that tends to favor the US dollar overall. To the downside, if we were to break down below the 1.25 handle, the market is likely to go much lower, perhaps reaching down towards the 1.2250 level. I am not calling for that but let us be honest here: if there is a currency that can get a sudden shock to the downside, it is the British pound.
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This article was originally posted on FX Empire
