British Pound Trying to Form a Basing Pattern

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Tuesday to show signs of stabilization, as we continue to consolidate overall. The 1.30 level underneath continues to be an area that of course is a large, round, psychologically significant figure, and an area that has been important multiple times on the longer-term charts. As long as we stay above the 1.30 level, it is likely that we are going to continue finding a reason one way or another to go long. Keep in mind that the Federal Reserve is a major contributor to what happens next, as traders are trying to figure out whether or not they are going to tighten in an aggressive manner, or if they will capitulate to Wall Street.

On the upside, the 50 Day EMA is currently sitting at the 1.3250 area and could cause a little bit of concern. Ultimately, this is a market that I think is trying to figure out whether or not we are going higher or lower for a bigger move, and if we were to break above the 50 Day EMA, or the 1.3250 area, then it opens up the possibility of a move to the 1.34 handle.

If we break it down below the 1.30 handle, then it enters a zone of support that extends down to the 1.28 handle. Because of this, market participants will have a difficult grind lower, but it certainly would make a statement if the market was to close on a daily candlestick below the 1.30 handle.

GBP/USD Technical Analysis Video 06.04.22

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