The British pound has broken down significantly during the course of the week to confirm that there has been less than impressive attempts to pick the market back up, although Friday has been slightly positive heading into the New York session. The 200 week EMA of course is an area that longer-term traders may pay attention to, but at the end of the day this is all about the US dollar strength more than anything else. After all, the fear out there is palpable, and that does tend to drive money into the greenback overall.
GBP/USD Video 31.01.22
With this being said, and of course the fact that the Federal Reserve has reiterated its desire to tighten monetary policy, it does make quite a bit of sense that we continue to see the US dollar strengthen in general. The market being bearish is nothing new, and if we break down below the bottom of the candlestick for the week, I think at this point in time we would see a move down towards the 1.32 handle, which was where we had formed a little bit of support at previously. If we do in fact reach down towards that area, it will be a major fight between the buyers and the sellers. Ultimately, this is a market that has seen quite a bit of noisy behavior, but it is worth noting that in general the British pound has been a bit of an outlier against the US dollar. After all, while other currencies were absolutely collapsing, the British pound has initially rallied, and then did “less bad” against the greenback.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
Gold Markets Continued Downward Slope
Natural Gas Prices Surge Higher on LNG Flows
Natural Gas Markets Have Extraordinarily Bullish Week
Silver Markets Get Hammered During the Week
US Dollar Has Explosive Week to the Upside
Natural Gas Markets Show a Pop