GBP/USD Weekly Price Forecast – British Pound Searching for Support
The British pound has fallen a bit during the course of the trading week to reach towards 1.32 handle, an area that has been important more than once. That being said, if we break down below that level then I think the British pound unwinds. This is a market that has been a bit negative as of late, and at this point in time you have to pay attention to the fact that the US dollar itself has been rather strong. We are below the 200 week EMA, so that is negative as well, perhaps allowing this market to drop down to the 1.30 handle.
GBP/USD Video 06.12.21
For what it is worth, I believe there is a significant barrier near the 1.35 handle as well, which of course is going to be something that causes a lot of headline noise, and therefore I think it will offer a certain amount of selling pressure as well. If we can break above the 1.35 handle, then I might consider buying again. It is going to be very noisy to say the least though, so with that being the case it is likely that the markets will have to pay attention to any move towards that area. Quite frankly, I think short-term rallies that show signs of exhaustion will continue to be nice selling opportunities.
Pay attention to the interest rate differentials because they always come into the picture as well. The Federal Reserve seems to be ready to tighten monetary policy via bond purchase tapering. Despite the fact that the jobs number came in lower than anticipated, it is likely that we are going to hold the line going forward.
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