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GBP/USD Forecast: Pound Awaits Big Moves Amid Uncertainty

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
  • The British pound experienced considerable noise during Monday's trading session, which isn’t surprising given the potential disruptions and uncertainties this week.
  • It’s hard to envision a scenario without significant volatility, and it seems likely that market turbulence will remain a key factor.

Keep in mind that we have the US election today, which being a third world country, the United States may not even know who its next president is for several days. So that could have markets on edge. Beyond that, we also have the Bank of England interest rate decision Thursday at noon GMT, followed seven hours later by the FOMC interest rate decision, which both are expected to cut 25 basis points.

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At this point, I think it's probably going to come down to the statement in the press conference. So, it'll be interesting to see how this all plays out, but we are at an inflection point. It is worth noting that we are currently between the 50-day EMA above and the 200-day EMA below. So that typically will cause a bit of volatility anyways.

GBP/USD Forecast Today 05/11: Pound Awaits Big Moves (graph)

Looking for Momentum

With that being the case, I think you've got a situation where market participants continue to try to find some type of momentum, but right now just are not seeing it. If we could break above the 50-day EMA, then it would obviously be a bullish sign. However, those interest rates in America continue to be stubborn and therefore keep the British pound at bay. A breakdown below the 1.2850 level, and therefore the 200-day EMA, could really have this GBP/USD market falling apart. In that environment, this is a situation where we have a lot of questions asked about the economic outlook for a lot of places, America included.

Ready to trade our GBP/USD Forex forecast? Here’s some of the best forex broker UK reviews to check out. 

Christopher Lewis
About Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
 

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