GBP/USD Price Forecast – The British Pound Continues to Fight

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Monday, to test the 1.21 level. That being said, the market is likely to continue to see resistance near the 50 Day EMA. The 50 Day EMA will attract a lot of interest, and therefore I think you continue to see a lot of “fade the rally” type of behavior.

The 1.20 level underneath should be important, and if we can break it down below there, then it is likely that we go looking for the 1.18 level underneath. The 1.18 level underneath is a major support level, so breaking through that would of course make a huge statement. On the other hand, if we wipe out the 50 Day EMA to the upside, we will more likely than not go looking to the 1.2250 level.

We are in a downtrend, and that has not changed. I believe that the Federal Reserve will continue to see plenty of reasons to tighten monetary policy, and that will course have a lot to say with where we go next. I have no interest in buying the British pound anytime soon because the Bank of Japan has already noted that we are more likely than not going to see a recession.

But that’s going to be the case, the British pound is going to continue to be very bearish over the longer term, but the occasional rally may offer a nice opportunity to start shorting again at the first signs of exhaustion. Given enough time, I do think that we retest the bottom.

GBP/USD Price Forecast Video for 09.08.22

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