GBP/USD Price Forecast – The British Pound Continues to Look Soft

British Pound vs US Dollar Technical Analysis

The British pound has shown itself to be weak yet again during the day on Tuesday as we continue to see the market simply hang about very low levels. Because of this, I think the market will more than likely show signs of exhaustion every time it tries to rally, and therefore I do not think this is a market that you can be a buyer of.

Conversely, I like the idea of fading rallies as they occur and would be especially interested in doing so near the 1.25 handle. That is a large, round, psychologically significant figure, a historically important figure, and an area where we have seen a lot of noise recently. Because of all of this, I think this is a market where if you are patient enough, you could get an opportunity to short at a better price.

Keep in mind that the CPI numbers are coming out of the United States on Wednesday, and that will of course have an influence on what the inflationary expectations are. That in turn will have a major influence on where the Federal Reserve will be looking, and therefore what happens with the US dollar. Because of this, we may be somewhat quiet between now and that announcement, but after that announcement Wednesday morning, I would anticipate quite a bit of momentum.

Looking at the chart, if we were to break down below the lows of the Monday session, it is very likely that the market could go down to the 1.20 level, but it will take some time to get there. Keep in mind that the Bank of England has recently stated a recession is coming.

GBP/USD Price Forecast Video 11.05.22

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