- The British pound has gone back and forth during the trading session on Monday as we continue to see a lot of noisy behavior.
- The market is currently hanging around a range between the 1.30 level above and the 1.2880 level or so below.
- At this point, the market is trying to work off some of the excess froth, and that does make a certain amount of sense considering that we had rallied so hard to get here.
Now we have a lot of questions about tariffs and the recession in the United States if it shows up. And of course, the Bank of England remains very hawkish. So, this does help with the British pound strengthening. The question now is, can we finally break above the 1.30 level on a strong daily close? So far, we have not been able to do so. Therefore, I think we're somewhat stuck in this range at the moment. Changing this will take a certain amount of momentum to reenter the markets.
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On a Break Lower…
If we break down below the 1.2875 level, it's possible that we could drop from there and go looking at the 1.2750 level where the 50-day EMA currently resides. That being said, I think you still have a market that overall is very bullish, and therefore you're looking at pullbacks as potential opportunities. While the US dollar is a bit of a mixed bag, the one thing that's been the case for some time now is that while other currencies were falling against the US dollar, the pound was at least somewhat resilient at times and definitely much stronger than a lot of other currencies. So, if we do see the US dollar get slammed again, it would make sense that the British pound is one of the main victors in that battle.
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