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GBP/USD Price Forecast – British Pound Breaks Resistance

Christopher Lewis

GBP/USD Video 27.05.20

The British pound has rallied significantly against the US dollar during early trading on Tuesday, as traders embraced the bullish attitude of the potential that there could be plenty of possible vaccines out there, which of course is jumping the gun to say the least. We have broken above the micro double top and cleared the 1.23 level though, so that of course is a very bullish sign.

That being said, the 50 day EMA is sitting just above, so I do think that it is only a matter of time before the sellers get involved and start pushing this pair back down. After all, the market has no business continuing to the upside, with perhaps the lone exception being a reason is that the Federal Reserve is trying to kill the greenback. Nonetheless, there are a plethora of reasons to think that perhaps the British pound continues to drift lower of the longer term due to the problems when it comes to the UK economy.

Yes, the UK economy is trying to open up, and as a result that should help the British pound and the British economy. Having said that, the coronavirus numbers are still horrible and the United Kingdom and of course the Brexit is still something that needs to be negotiated, so therefore it seems as if there is only a matter of time before the sellers come back in. At this point, the market breaks back down below the 1.23 handle, then I may consider shorting again. As far as buying is concerned, if I do choose to go long of the British pound, I am not going to do it against the US dollar.

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

This article was originally posted on FX Empire