Advertisement

GBP/USD Price Forecast – British Pound Slams Into 50 Day EMA

Christopher Lewis
·2-min read

The British pound rallied rather significantly during the early hours on Monday, slamming into the 50 day EMA. Part of this was because a member of the Monetary Policy Committee suggested that the idea of negative interest rates were almost an impossibility. That of course is good for currency if you are worried about those negative interest rates, but at the same time we have the overhang of Brexit, shutting down of the British economy, and of course just week numbers in general when it comes to the economy.

GBP/USD Video 29.09.20

In other words, it makes sense that we would fade this rally, and it certainly looks as if that is the way this is being played out rather quickly. The market is in a downtrend, at least over the last couple of weeks, so it is likely that we will see sellers commit back in at the first signs of exhaustion. The 200 day EMA underneath will course be a bit of a target for sellers, and if we can break down below the lows of last week, it is likely that the British pound will go looking towards the 1.25 handle.

Furthermore, there are concerns about liquidity when it comes to the US dollar starting to creep into the narrative again, so that of course will have people looking towards the greenback for value. Ultimately, I have no interest in buying the British pound until we get a daily close above the 1.30 level, although you can make an argument for an uptrend over the last several months. It clearly looks as if we are trying to break that uptrend completely down.

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

This article was originally posted on FX Empire

More From FXEMPIRE: