GBP/USD Price Forecast – British Pound Gets Hammered On Monday

The British pound has gotten hammered during the trading session on Monday to kick off the week, slicing through the 50 day EMA. The uptrend line underneath should be supportive, as it coincides nicely with the crucial 1.30 level. At this point, the market is starting offer some value, and you should keep in mind that the market has recently made a “higher high”, but then the question now is whether or not the 1.30 level offers enough support to continue with a “higher low.”

GBP/USD  Video 04.02.20

All things been equal, I believe that the market probably continues to go higher, reaching towards 1.35 level. Most of the noise has been due to Boris Johnson suggesting that he was willing to walk away from the EU negotiations unless he gets a comprehensive deal. The expectations that he laid out was for the same type of deal Canada got with the EU, and if he does walk away then the deal between the United Kingdom and the European Union will default to the WTO agreement, meaning that tariffs could be part of the future. All things being equal though, it’s very likely this will be a short-term blip on the radar, because quite frankly the EU and the UK do not want some type of major tariff barriers between the two. At this point, it is more than likely only a matter of time before cooler heads prevail as the divorce has been made official in the last couple of sessions. At this point, it’s about making the best of the situation.

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