GBP/USD Price Forecast – British Pound Pulls Back Slightly

The British pound has drifted a bit lower during the trading session on Friday as we are starting to wipe out some of the gains from the interest rate decision. With the Bank of England raising interest rates on Thursday, the market looked as if it was ready to go much higher, but on Friday we already do not care. Because of this, the market is likely to continue seeing a lot of noisy behavior, but an argument can be made for the market to drift a little bit higher. However, we have seen a major “risk off” attitude around the world of the last couple of days which seems to have put a bit of a dampening on this pair.

GBP/USD Video 20.12.21

To the downside, the 1.32 level seems to be significant support, and if we can wipe out that area to the downside, it is very likely that we would see this market looking towards the 1.30 level. To the upside, if we were to take out the 1.34 handle, then it is likely that the market could go much higher. Nonetheless, I think this comes down to the US dollar more than anything else, right along with risk appetite.

The British pound has been very noisy to say the least, but the 50 day EMA is starting to reach towards the downside, and that does suggest that the selling pressure is probably going to return sooner rather than later. I said a couple days ago that I was looking for an opportunity to sell from a higher level, and we have had that already. However, it is very likely that we will continue to see that happen yet again.

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