GBP/USD Price Forecast – The British Pound Continues to Show Hesitation

British Pound vs US Dollar Technical Analysis

The British pound has failed to break above the 1.20 level handily, so therefore it looks as if we are going to continue to struggle in general. That being said, I do think it is probably only a matter of time before we see significant selling pressure, to continue the overall downward trajectory. We are a bit overdone, so it is possible we could bounce a bit more from here, but I still believe that is less likely sustainable going forward as the Federal Reserve is almost certainly going to remain tight.

Beyond that, there are serious concerns when it comes to global growth, therefore it means that we will have to see market participants continue to price in the idea of a “risk off” type of trade. If they do have to do this, that almost always means that the US dollar gets a boost. Ultimately, this is a scenario where I think we probably have quite a bit of volatility ahead of us, but given enough time, I do think that we revisit the lows yet again.

If we were to break above the 1.21 level, then the 50 Day EMA is waiting above and looking somewhat threatening. In that general vicinity, I would anticipate seeing a bit of exhaustion come into the market, possibly punishing risk takers. The whole idea behind the British pound rallying is from an oversold condition, which has some merit, but can only last for so long. With this in mind, I think that short-term rallies will continue to be faded going forward, especially as we have a major Federal Reserve meeting coming next week.

GBP/USD Price Forecast Video for 21.07.22

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This article was originally posted on FX Empire

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