British Pound vs US Dollar Technical Analysis
The British pound initially tried to rally during the trading session on Monday but gave back early gains as we continue to see a lot of resistance above. The market has a ton of resistance just above, and therefore it is difficult to imagine a scenario where I would be a buyer. At this point, I would anticipate that the British pound is going to trade down to the $1.20 level, but we may get a short-term rally between now and then.
In fact, I believe that the $1.26 level above is a bit of a ceiling in the market, with of course the $1.25 level offering a certain amount of psychology in the market that will have to be paid close attention to. Given enough time, the market will see plenty of sellers jump back into the market as the reserve continues to tighten, and of course, is probably one of the most hawkish central banks in the world right now.
Adding more downward pressure is the fact that there is a lot of “risk-off” behavior out there, which in and of itself will drive money into the US bond markets. With this being the case, it is very likely that we will continue to see trouble going forward, with the trend so firmly ensconced, and of course, the momentum of these markets takes quite a bit of effort to turn things around. The market would have to break above the 50 Day EMA at the very least in order to start to look in the other direction. Ultimately, this is a “fade the rally” situation.
GBP/USD Price Forecast Video 17.05.22
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