One of the major things that may happen during the upcoming weeks is that the GBP/USD Forex pair may break out and finally break out to new highs. To be sure, it is not a simple undertaking, especially when you have the future in your hands and if the market moves in your favor. However, there are a number of signs that it could be the case.
One key thing to consider is the rate of the British Pound’s fall against the US Dollar. This has actually been happening, although not as severe as it was during the last GFC period. The traditional indicators, of course, show a fall of over half of one percent per day. This compares well with other world currencies, including the Euro and the Yen.
It is generally agreed that the price of something is determined by the amount of supply and demand, or supply and demand plus the price. In a market that has over one trillion dollars trading daily, this is not much of a factor. Why? Because such a market is able to have an over-supply for a long time, while its demand is quite limited.
In an effort to protect itself from the continued falling value of the British Pound, the British government has been trying to print more money, yet the supply continues to increase. When the government realizes this, it is likely that it will begin to adjust its efforts. This does seem to be taking the right steps.
A big issue that is currently being debated in the UK is whether the British Pound should remain a member of the European Union or not. If the UK leaves the EU, it will be forced to devalue the British Pound, which has already begun. It is a moot point at this point, but the beginning of the debate could be encouraging in terms of the upcoming break out.
With all of the market influences, you have to consider the timing of these events. The potential breakouts have been happening consistently throughout all of the periods, so why is it being delayed? One issue is that such a big move may be in the offing. It may be difficult to find an exit strategy at this point.
When you look at the big debate, there is concern about immigration issues that could get worse as time goes on. So, we are looking at a massive potential shock to the global economy. You could end up seeing a total collapse of global economies, leading to the collapse of the banking system.
If this is the case, it would lead to some of the worst social instability we have ever seen. The main risk is that the Euro would take the brunt of the blow. A collapse of the Euro would be extremely damaging to the British economy, given that we are tied to the common currency. It is not hard to see why some people are now very bullish on the price of the British Pound.
Another factor is that the British Pound is no longer undervalued. In fact, the Pound has lost about 50 percent of its value since last June. Investors want to know where they stand and what they can do to buy this precious metal.
Some market experts think that the United Kingdom has the chance to stay in the EU, since there is very little economic devastation that could occur without that scenario. It also appears that the British pound may only gain a fraction of its value as the effect of the vote makes itself felt. If the United Kingdom votes to leave the EU, it would take about six months for the GBP to regain its position. At this point, many financial experts believe that the British Pound is a long way from being back at parity with the US Dollar.
One thing is for certain, and that is that the GBP is not only buying but also selling during the current period. It is a volatile area to trade in and this may hold true for the long term. as, well.