British Pound Bounces From Large Round Figure

The British pound has bounced a bit during the trading session on Tuesday as the 1.30 level is respected. At this point, the British pound is oversold so I do believe that a bit of a bounce could come. The 1.32 level above should be resistance, and most certainly the 50 Day EMA will be as well. The US dollar is waiting to see what the Federal Reserve has to say at the end of the meeting, and therefore it will be interesting to see how it behaves afterward. After all, the market is trying to figure out whether or not the Federal Reserve will remain as hawkish as it had been.

GBP/USD Video 16.03.22

The market bouncing from here makes perfect sense because currency pairs do not go in one direction forever. That being said, the market were to break down below the 1.30 level, then it is likely that we could break down towards the 1.28 handle, an area that has been important in the past as well. I do not have any interest in buying this pair unless of course the Federal Reserve completely changes its attitude and trajectory completely.

That being said, it is worth noting that the Federal Reserve has to worry about inflation, which means it may very well disappoint the market and send the US dollar even higher. However, the war in Ukraine does provide them a bit of an “out”, or at least reason to question whether or not they should become as aggressive as recently stated. That being said, the market is going to continue to see volatility.

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