GBP/USD Price Forecast – British Pound Recovers After Initial Plunge

The British pound initially plunged during panic selling in Asia as a new coronavirus variance has been detected. That being said, it is a bit overdone, and it seems as if London has agreed. While the British pound is most certainly in a downtrend, the reality is that the market has looked through a lot of these pandemic related headlines over the last two years, and this will simply be yet another headache. The fact that it was Thanksgiving night in America probably had a lot to do with what happened as well, because a lot of North American banks were not working their desks. With that being said, I would not read too much into the initial dip, although it does jive well with the overall trend.

GBP/USD Video 29.11.21

To the upside, I anticipate that the 1.35 is still your ceiling, so you need to look at it through those lenses. If we were to break above there then it would obviously change a lot, but right now that does not look very likely to happen. In the short term, I am looking to fade rallies that show signs of exhaustion, because quite frankly this is a market that has been one to short for a while.

The Federal Reserve still looks likely to taper bond purchases going forward, while the Bank of England remains hopelessly dovish. With that being the case, I think it is probably only a matter of time before we see this market go lower, although the reaction on Friday was nothing short of ridiculous.

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