British Pound Continues to Look Soft

The British pound has gone back and forth during the trading session on Friday as we continue to push lower and continue the overall downtrend. That being said, if we break down below the bottom of the Friday candlestick, then it is very likely that the market goes to look towards the 1.30 handle. This is an area that will have a certain amount of psychological influence, and of course, is an area that longer-term had offered support and resistance both.

GBP/USD Video 14.03.22

On the upside, we would have to break above the 1.32 level to have a significant pop, but even then, I think you are looking for signs of exhaustion to start shorting again. The US dollar should continue to be strong due to the fact that there is so much concern out there around the world and of course the Federal Reserve is getting ready to tighten. Ultimately, this is a market that will find a reason to go lower. Whether or not we can break down below the 1.30 handle is a completely different question, so we will have to wait and see whether or not that ends up being the case.

As things stand right now, I like fading short-term rallies that show signs of exhaustion, and I think we will get that opportunity multiple times. Ultimately, I think that the US dollar is going to be the currency to own overall, as we not only have higher interest rates coming out the United States, but we also have a lot of concerns around the world.

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