British Pound Gives Up Early Gains

The British pound has initially tried to rally during the course of the trading session on Friday but gave back the gains rather quickly and it looks as if we are going to continue to struggle with the 1.32 handle. With this being the case, the market will continue to pay close attention to that level, and therefore it makes a certain amount of sense that we could drop towards the 1.30 handle underneath. The 1.30 level underneath is a large, round, psychologically significant figure that a lot of people will pay close attention to.

GBP/USD Video 21.03.22

The 1.32 handle above is resistance, so if we were to break above that we could make a move towards the 1.34 handle after that. The 1.34 handle is an area that we have seen resistance at previously, and therefore that would be the next major battlefield. All things being equal, when this market rallies, I will be looking for signs of exhaustion to start shorting again.

The 50 Day EMA is sloping lower and suggesting that we will continue to see downward momentum. Because of this, I just do not believe that longer-term traders will be looking to get involved. Furthermore, interest rates continue to rise in the United States for the rest of the year based upon the Federal Reserve guidance, and there are plenty of reasons to think that we will continue to see US dollar strength. There are plenty of geopolitical and economic concerns out there as well that could continue to have people running towards the safety of the greenback.

For a look at all of today’s economic events, check out our economic calendar.