GBP/USD Weekly Price Forecast – Markets Ignore Bank of England

The British pound has ended up forming a relatively neutral candlestick, which on the surface looks supportive, considering that we had formed a hammer during the previous week. However, when you drill down to the daily timeframe you begin to notice something. The Thursday candlestick was very bullish and sent the market looking towards the 200 week EMA, but then rolled over almost as quick. Because of this, it suggests that markets out there do not necessarily believe that the Bank of England is going to be raising interest rates anytime soon going forward, and it of course is suggesting that perhaps there is more of a rush to cover risk at the moment.

GBP/USD Video 20.12.21

At this point in time, if we break down below the 1.32 handle, it is very likely that this market goes looking towards 1.30 level. The one thing that might save the British pound in the short term is the fact that we are heading into holiday trading and there might simply not be enough liquidity in the market to really get things moving. I suspect that we probably have more sideways action than anything else over the next couple of weeks, although I do recognize that a break above the highs of this past week would be very bullish and could send the pound looking towards 1.35 handle. As I stated previously, break down below the lows of last couple weeks opens up the possibility of 1.30. Anything underneath their opens up the possibility of a huge move lower. Again, this is not the type of move that I expect, but those are some possibilities.

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