The British pound has gone back and forth during the trading session on Wednesday, essentially going nowhere. We are sitting above the 50 day EMA, perhaps looking to reach towards the will .25 level given enough time. Alternately, we could turn around and reached below the 50 day EMA, it’s likely that the market would sell off rather drastically at that point. All things being equal though, I do think that we probably grind in this general vicinity to await what happens next with the Brexit.
GBP/USD Video 11.09.19
I believe it’s only a matter of time before something bad happens, perhaps even a “no deal Brexit” even though the UK Parliament had in theory made that illegal. One thing that is probably worth noting is the fact that the European Union has yet to offer any signs of an extension. Boris Johnson still suggests that he won’t ask for an extension, and several European politicians have suggested that the default scenario now is for the United Kingdom to simply leave without any type of deal.
The 1.25 level above looks to be a bit of a “ceiling” as there has been a massive amount of choppiness in this region, and I think it’s likely to see a lot of selling pressure come back in if we do reach for that time. All things being equal, I’m looking for signs of exhaustion after a rally and although we have not had that yet, certainly it could come rather soon. If we break down below the 50 day EMA and specifically the 1.2250 level, then I think the market could go down to the 1.20 level next which was the massive bottom.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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