British Pound Gives Up Early Gains

The British pound has initially shot higher during the trading session on Thursday but has run into a resistance barrier in the form of the 1.32 handle. By doing so, the market looks as if it is getting a bit exhausted and ready to continue the overall downtrend. That being said, this is not to say that we are suddenly going to fall apart, just that we are still very much in a downtrend, despite what you may or may not have thought after the Federal Reserve meeting yesterday.

GBP/USD Video 18.03.22

Looking at this chart, it is obvious that the 1.30 level is going to be important, and the gateway to much lower pricing. If we do break down below the 1.30 handle, then we could go looking towards the 1.28 handle after that. Alternately, if we turn around a break above the 1.32 handle on a daily close, then it is likely that we go looking towards the 1.34 handle. That seems to be a little less likely at this point, especially as the US dollar has been strengthening against everything due to the concerns around the world.

This is not necessarily an indictment on the British pound as much as it might be a confirmation of the US dollar. That being said, I do not want to short the US dollar against just about anything at the moment, with perhaps the exception of gold. The market participation during the trading session on Wednesday may have been a little bit lax, as the reaction to the Federal Reserve announcement made very little sense. I think it was more or less nonsense and now we will get back to the overall trade.

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