GBP/USD Forecast Today 04/02: Recovers Nicely (Video)

(MENAFN- Daily Forex)

• The British pound has had a wild ride during the trading session on Monday as we gapped lower to kick things off only to fill the gap later.
• Keep in mind that a lot of what you are seeing here is panic due to new tariffs coming out of the United States.
• As is usual trading in an era of the trump administration, things have been volatile.

Unsurprisingly, we've already seen a couple of countries come into the fold and be willing to negotiate further, Mexico being the biggest one, of course, as they have said that they would bring 10,000 National Guard troops to the border to stop the fentanyl flowing across the border, as well as migrants. Furthermore, you also have to keep in mind that there was a little snippet today about how the EU might get tariffs. He said that the UK had been taking advantage of things, but he thought, and he made it sound like, the situation in the UK was a minor one that could probably be worked through pretty easily. With that being said, it does make sense that the British pound has rallied.

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But a lot of what you've seen across the Forex world has been in reaction to Mexico coming to the table and willingly looking to help out the United States. That suggests that perhaps this won't be as ugly as it once was. As I record this, we're still waiting to see what Justin Trudeau has to say in Canada, which is weird because he resigned, but that's a whole different story.

With all of this being said, this is a market that I still favor with the downside. That hasn't changed. This just sets up another opportunity to buy cheaper US dollars down the road. I still believe that the 1.25 level is massive resistance, especially now that we have the 50 day EMA there. So, I'll be willing to take advantage of any weakness, perhaps some long wick or something to that effect to the upside that shows that we are running out of momentum.

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