GBP/USD Price Forecast – British Pound Continues to Sink Against the Greenback

British Pound vs US Dollar Technical Analysis

The British pound initially rallied a bit during the trading session on Wednesday but gave back gain as the inflationary numbers in the United States came out much hotter than anticipated. Because of this, the money ran toward the US dollar as interest rates skyrocketed. This does make quite a bit of sense, as the central bank will be forced to be very tight with monetary policy in the United States. With this and the fact that the Bank of England is much quieter than the Federal Reserve when it comes to this, I think we have a one-way trade.

Yes, there will be the occasional bounce, but that bounce will almost certainly be short-term at best, and therefore it should set up for a nice selling opportunity. I believe that the 1.20 level will cause resistance, and breaking above there would be a good sign, but not necessarily a reason to think that the trend has changed.

Underneath, if we can break below the 1.18 level, then the market can continue to go much lower. Ultimately, I do think that happened but we are a little bit overstretched at the moment, so therefore we could see a few short-term bounces. That only offers “cheap US dollars” from everything I see, so therefore it’s likely that we could see plenty of people willing to jump in and short this market. The market would have to break above the 1.23 level at this point to change things and turn the market around as it would break above the 50 Day EMA. Even then, I would not be completely convinced them with something on the macroeconomic side changed.

GBP/USD Price Forecast Video for 14.07.22

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