GBP/USD Price Forecast – British Pound Breaks Down Significantly

The British pound has pulled back significantly during the trading session on Wednesday, as the market tested the 200 day EMA late on Tuesday but gave back the gains towards the close. Since then, we have white doubt that candlestick and have driven well below the 1.25 handle and are currently testing the potential bullish flag that the market had been paying attention to previously. With that being the case, it’s likely that the market will go looking towards that flag and see a certain amount of buying pressure in that region. The question now isn’t so much as to whether or not we can drop from here, but whether or not the trend will hold?

GBP/USD Video 16.04.20

The British pound has been extraordinarily bullish, so it seems as if traders have been ignoring the potential troubles coming out of the United Kingdom, not the least of which of course is going to be the extended lockdown. Beyond that, we need to think about Brexit as well, because that issue hasn’t gone anywhere, although it has been postponed due to the global pandemic. All things being equal though, in times of concern people want US dollars, so don’t be surprised at all if this thing continues to grind lower. On the other hand, if we do see a bounce that recaptures the 1.26 level, that would be an extraordinarily bullish sign. This is a market that is probably best left alone for the next 24 hours so that we can settle the question of whether or not the support holds.