GBP/USD Weekly Price Forecast – The British Pound Plunges Back to the 1.20 Area

British Pound vs US Dollar Weekly Technical Analysis

The British pound has initially tried to rally during the week, especially with the Bank of England raising interest rates. However, the Bank of England has also stated that the British economy is almost certainly going to enter a recession, so we have seen a complete turnaround in the currency. On the other side of the Atlantic, the jobs number on Friday was over 500,000 for the month of July, driving home the point that the Federal Reserve is going to be forced to raise interest rates going forward. Because of this, I think it is probably a matter of time before we see the British pound suffer even further.

The 1.20 level is a psychologically important figure and an area that has a certain amount of market memory attached to it. If we break down below the 1.20 level, it’s likely that we could go down to the 1.18 handle. At this point, the market continues to see a lot of noisy behavior, and therefore I think that area could get tested rather soon.

Regardless, it looks as if the best way to trade this market is going to continue to be fading rallies, as they just do not have any type of momentum. The 1.2250 area seems to be resistive, but whether or not we can get there is a completely different question now that the psychology has been tilted so far in one direction yet again. The world is slowing down, which typically means that the US dollar strengthens. I think this correlation is probably going to continue yet again, thereby offering more of a “pay the rally” type of situation here.

GBP/USD Price Forecast Video 08.08.22

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