GBP/USD Forecast: July 2020

Christopher Lewis

Looking at this currency pair, we have seen a lot of negativity, and that makes quite a bit of sense considering there are concerns about the United Kingdom and its economy. Furthermore, there is Brexit to worry about which still looks as if it is going to be a “hard Brexit.” If that is going to be the case, people will be worried about what happens with the British pound next, as there will probably be a lot of negativity thrown its way. Beyond that, we have the Bank of England adding to the pressure.

The Bank of England is currently testing out the waters for the idea of negative interest rates. If that is going to be the case, this will be horribly negative for the British pound, as it will drive money away from fixed assets and that country. Having said that, there are other central banks around the world going that route so it is possible that it might be more of a “beggar thy neighbor” scenario where people will start to look at “less bad” currencies as a value. After all, the currency markets are a game of relative value, so that of course could throw another kink in the price action.

Advertisement
Take advantage of record-breaking volatility in the British Pound
Trade GBP/USD now!

When it comes to this specific pair though, it is likely that the US dollar will continue to be a bit more tenable to own than the British pound, due to the fact that you have the safety of the US Treasury market, which has been attracting a lot of demand. As long as that is going to be the case, there will be a lot of demand for US dollars, so with all of that being said it does make sense that we continue to go lower. After all, you can see that we are most recently rallied towards the 1.2750 level and then have fallen right back down. The floor underneath at the 1.20 level looks highly likely to be tested, and if we do break down below there, we could go looking towards the 1.1750 level. However, if it holds then we could see a bit of a bounce only to be sold off yet again. It is difficult to get overly excited about going long of this pair so I think this will either be a breakdown, or more of a “fading the rallies” type of market for the next month.

GBPUSD

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Currency Pairs:
Comments

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments
Add Comment

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.