British Pound Continues to Recover

The British pound initially fell during the trading session on Thursday as we continue to see a little bit of downward pressure. That being said though, this is a market that has been oversold for a while so would not be a huge surprise at all to see this market continue to grind higher. That is exactly what we have seen so far during the trading session on Thursday, so a little bit more of a bounce is probably what you can expect.

GBP/USD Video 11.03.22

Having said all of that, I do think that there is a significant amount of resistance above, especially near the 1.33 handle. That is an area where we had seen a lot of consolidation previously and of course a major selloff. With that being the case, I like the idea of shorting at higher levels, which might be more of a “next week trade.” Furthermore, you have the Federal Reserve statement next week that everybody is going to be paying attention to, so that might be your catalyst.

Underneath, the market tested the 1.31 handle previously, so I think in the short term that is going to be your “floor the market.” If we were to break down below there, then it is likely that this market will go looking towards the next major support level in the form of the 1.30 handle, which is not only an area where we have seen a lot of noise previously but also an area that has a lot of psychology attached to it for obvious reasons.

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