British Pound vs US Dollar Weekly Technical Analysis
The British pound initially tried to rally for the week, but then collapsed into the 1.20 level. This is a large, round, psychologically significant figure, which has been tested recently. It’s a reasonably important historical level as well, so I think a lot of people are going to be paying attention to this. This market breaking down below the 1.20 level opens up the possibility of 1.18, followed by 1.16. The British pound itself is not necessarily a currency that I’m overly worried about, this pair has more to do with the US dollar than anything else right now. After all, the US dollar is by far the strongest currency in the world, and I don’t see that changing anytime soon.
Rallies at this point in time should be selling opportunities because quite frankly there’s nothing good from an economic standpoint going on out there. Because of this, people will continue to flood to the US dollar, as it is considered to be a “safe haven currency.” The British pound will probably do okay against other currencies, but this particular pair is going to be extraordinarily bearish, as you have seen over the last several months. I suspect that we will continue to have US dollar strength through most of the summer, as the world slips into recession.
It is not until the Federal Reserve changes its overall attitude that I see the US dollar losing steam, and at this point that does not look likely to happen anytime soon. With the Federal Reserve becoming increasingly hawkish, the US dollar has a long way to go.
GBP/USD Price Forecast Video 04.07.22
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This article was originally posted on FX Empire
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