GBP/USD Price Forecast – British Pound Continues to Consolidate

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Friday, as we are continuing to see a lot of noisy behavior in general. At this juncture, the 1.20 level is a major resistance barrier from not only a psychological standpoint, but the fact that the 200-Day EMA sits just above there. This is a situation that will continue to be closely watched, as the market has been in such a major downtrend for quite some time. Ultimately, the market is trying to decide whether or not we are going to continue to see the US dollar strengthened over the longer term, or if the situation has completely changed.

If you look at the Thursday candlestick, you can see it’s a bit of a hammer, so if we break down below it, it kicks off a “hanging man” formation. At that point, the market then comes down to the 1.15 level. That’s an area where we have the 50-Day EMA, and of course there is a lot of interest in that area due to the fact that it is a large, round, psychologically significant figure. Breaking down below that level then opens up the possibility of an even deeper correction.

Keep in mind that the United Kingdom continues to see a lot of headwinds going forward, and therefore it more likely than not will show itself in the currency markets. Furthermore, the Federal Reserve is very tight with its monetary policy, and therefore it should continue to favor the US dollar despite the fact that some people are calling for a smaller rate hike in December. At this point, the Fed has done nothing to warrant that decision.

GBP/USD Price Forecast Video for 21.11.22

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