GBP/USD Price Forecast – The British Pound Surges After Cool CPI

British Pound vs US Dollar Technical Analysis

The British pound rallied rather significantly during the trading session on Wednesday after the CPI number in the United States came out a little bit cooler than anticipated. Now that we’ve got this out of the way, the British pound has shot quite a bit higher, but it also looks as if it is running into a significant amount of resistance. The 1.2250 level has been important a couple of times, and that’s exactly what we slammed into on the way higher.

Ultimately, this is a market that is still very much in a downtrend, and although the candlestick is very large, that is not assuming things have changed yet. If we do break above the 1.23 level, then we have to take a significant move to the upside in order to truly break out of the trend. I have the trend changing at the 1.26 level, so as long as we are below that level, I have no interest in shorting this market. If we did break above there, that would make this more of a “buy-and-hold” type of market. I don’t see that happening, and quite frankly we would need to see rates get slaughtered for that to happen.

It’s also worth noting that the Bank of England has admitted that a recession is coming to the United Kingdom, and therefore it’s difficult to imagine that the British pound will rally in the long term. That doesn’t mean that we can have a little bit of a bounce, but it does mean that I will be looking to fade rallies at the first signs of exhaustion.

GBP/USD Price Forecast Video for 11.08.22

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