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GBP/USD Price Forecast – British Pound Fails at 200 Day EMA

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·2 min read
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The British pound has initially tried to rally during the course of the session on Friday but then gave back gains near the 200 day EMA. That being said, the market is likely to continue to reach towards the 1.36 handle underneath. The 1.36 handle has been an area of support previously, and therefore if we break down through that I think that the market will probably fall apart. Quite frankly, that is an area that has been important multiple times, and therefore I think it would attract a lot of attention if we fall through it.

GBP/USD Video 27.09.21

Breaking down through that level then opens up the possibility of a move down to the 1.35 handle, possibly even down to the 1.30 level over the longer term. I have no interest in trying to get long of this market anytime soon, with the 50 day EMA curling towards the 200 day EMA. If it does break down below it, then you get the infamous “death cross” that a lot of people pay so much attention to. The market is likely to see a lot of traders trying to push through the bottom, and if they do, it is very likely that the market goes looking towards much lower levels.

If we did somehow break above the 50 day EMA, then it would be a very bullish sign, but it is not until we break above the 1.39 level that I would start to get truly bullish. At that point, I think that the British pound could take off towards 1.42 handle. Obviously, that would take a lot of effort, but if we did break out to the upside it would be an explosive move.

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This article was originally posted on FX Empire

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