GBP/USD Price Forecast — The British Pound Continues to Act Noisily

British Pound vs US Dollar Technical Analysis

The British pound initially pulled back a bit during the trading session on Friday but then turned around to show signs of link again. Ultimately, this is a market that has been a little overdone to the downside, so it would make sense that we see a recovery due to the fact that the market is a little oversold. That being said, I don’t necessarily want to buy the British pound, rather I would like to short this pair after a little bit of a rally. I would like to see this market rally and then show signs of exhaustion that you can jump on.

The 1.20 level above is previous support, so it should be a significant amount of resistance. The 50-day EMA is dropping rapidly towards that area, so it does suggest that we could see a lot of resistance in that general time frame. The market bounce should give an opportunity to pick up “cheap US dollars” and therefore that is the plan I have going forward. The British have already suggested that they are going to go into recession, via the Bank of England.

Because of this, I will not be buying Pounds until something either changes in that country or with the Federal Reserve and its tight monetary policy. Furthermore, we also need to see more “risk-on behavior” in order to see the US dollar start to lose value for any significant amount of time. That being said, anything is possible, so make sure you pay close attention to overall market sentiment. The market participants will probably be collecting profit after this is moved lower.

GBP/USD Price Forecast Video for 29.08.22

For a look at all of today’s economic events, check out our economic calendar.