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GBP/USD Price Forecast – The British Pound Continues to Show Signs of Weakness

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British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Friday as it looks like the market is a bit exhausted at this point. Keep in mind that there has been a major surge in the US dollar, so it does make quite a bit of sense that we would see this market either stabilize or bounce. While the British pound looks extraordinarily weak, you need to keep in mind that you are looking for value in a currency when you are buying it, so a bounce is exactly what you would like to see. This gives you the ability to pick up “cheap US dollars”, and follow the overall trend. That being said, it is also possible that we continue to break lower and do not even bounce.

Either way, it is very likely that the British pound is going to go to the $1.20 area. The $1.25 level above is massive resistance, so I would be a bit surprised to see the market break above there. With that in mind, I will be looking at this market as one that I cannot buy anytime soon, and therefore I assume this is essentially a “one-way trade.”

The resistance barrier extends all the way to the 1.26 level, so therefore it is not until we break above there that I would start to question the trend. However, the 50 Day EMA is currently at the 1.2850 level, and starting to fall. Because of this, think it is probably only a matter of time before sellers would return regardless. We need a fundamental reason to think that the US dollar suddenly going to drop in value, which would almost certainly have something to do with the Federal Reserve.

GBP/USD Price Forecast Video 16.05.22

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This article was originally posted on FX Empire

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