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GBP/USD Price Forecast – British Pound Pulling Back From 200 Day EMA

GBP/USD Video 05.06.20

The British pound has pulled back a bit during the trading session on Thursday, which quite frankly it should have. The market had gotten ahead of itself and although the US dollar may be something to get sold off into the future, it cannot be decimated in just a few days. Quite frankly, there is far too much US dollar denominated debt out there for that to happen.

That is the catch with the US dollar, there is always some type of necessity for it. Furthermore, the British pound has to deal with the Brexit and a lot of noise from the coronavirus reopening and all of those headline risks out there when it comes to all the nonsense around Brexit. Because of this, I think that what we are looking at here is a return to some type of sanity.

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In fact, you can make a strong argument for some type of range trying to be formed, and the 200 day EMA of course attracts a lot of attention. With that in mind, I do think that we break down and a move below the 1.25 level probably accelerates that move. The other side of the equation of course is that the market breaks above the top of the shooting star from Wednesday, which would of course be a very explicit signal. That is based upon a fractal pattern on short-term charts, something that always catches the attention of a lot of traders. I think at the very least, we need some type of pullback even if you are bullish.

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

This article was originally posted on FX Empire

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