GBP/USD Price Forecast – The British Pound Starts to Recover

British Pound vs US Dollar Technical Analysis

The British pound fell significantly during the trading session on Tuesday to reach the 1.18 level before bouncing a bit. Ultimately, the market has shown a little bit of life here, but I think this is a market that is oversold. Ultimately, if we do see a little bit of a rally, I think we have signs of exhaustion that we have to look forward to in order to pick up “cheap US dollars.”

The market has fallen rather precipitously as the US dollar has been like a wrecking ball against almost everything. Because of this, the market is likely to see more downward pressure over the longer term, but it does look like we are overdue for a bit of a bounce. At the first signs of exhaustion, then it’s likely that we will see sellers jump back in. The 1.20 level is an area that I think should offer quite a bit of negativity. Even if we break above there, we could go looking as high as the 50 Day EMA which is the 1.23 level just waiting to cause problems as well.

The alternate scenario is that we break down through a hammer, and then plunge much lower. I do think we will eventually, but we are so overstretched at this point that I think a bounce makes quite a bit of sense. I will look at that as an opportunity to pick up dollars, and therefore I’m not interested in playing the bounce. A little bit of patience will probably go a long way, and therefore I don’t feel rushed to do anything at the moment.

GBP/USD Price Forecast Video for 13.07.22

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