Sterling Gets Hammered

British Pound vs US Dollar Technical Analysis

The British pound has sold off rather drastically during the trading session on Thursday as the US dollar continues to strengthen quite drastically. By doing so, the market looks as if it is ready to go looking to the 1.23 level over the next several sessions. Do not get me wrong, I still see a lot of noise below the 1.25 handle, but it is clear that the market still favors the US dollar, and with all of the concerns around the world, that does make a certain amount of sense. Because of this, I think that short-term rallies will continue to be sold into, with the 1.26 level offering a bit of a short-term ceiling.

Even if we were to break above the 1.26 level, it is very likely that the 50 Day EMA will end up being a major resistance barrier as well, so mean that we can bounce that high. If and when we do, then I think we have a situation where the occasional rally will offer an opportunity to pick up “cheap US dollars.” With this, it would be a simple continuation of the overall downtrend, something that I would expect to be the case going forward.

Keep in mind that the Federal Reserve has already acknowledged that they are going to do a couple of more 50 basis point hikes, unlike many other central banks around the world that are not quite as direct in their approach. Furthermore, there are a lot of concerns about a global slowdown, which almost always benefits the US dollar overall. With this, I do not have any interest in buying this pair anytime soon.

GBP/USD Price Forecast Video 06.05.22

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