GBP/USD Price Forecast – The British Pound Continues to Fall Apart

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Wednesday but has struggled with the 1.20 level to offer resistance. At this point, the market is likely going to continue to sell off after every significant bounce, and short-term traders will continue to take advantage of this. After all, the Federal Reserve is very tight with its monetary policy, while the rest of the world burns. With that being the case, the market is more likely than not going to continue to favor the downside, as the US dollar is by far the currency that is attracting massive inflows.

Furthermore, the UK is likely to continue struggling with inflation and a lack of growth, while the United States at least has the healthiest economy out of all of the majors. Remember, it’s not necessarily whether or not the United States is doing well, it’s just that it’s doing better than the United Kingdom. When you trade currency pairs, you are putting on a relative trade, and therefore you need to understand that one can be “less bad” and end up benefiting in this environment.

If we turn around a breakout above the 1.20 handle, then it’s possible that we could go to the 1.21 handle, maybe even the 1.22 handle. Nonetheless, I think there would be a significant amount of exhaustion that comes into the market sooner or later, so it is most certainly worth paying close attention to. With that in mind, I fade rallies, and I sell breakdowns in this pair going forward. I anticipate that the British pound will hit the 1.18 level, and then maybe the 1.16 level rather quickly.

GBP/USD Price Forecast Video 07.07.22

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