GBP/USD Price Forecast – Bank of England Raises Rates

British Pound vs US Dollar Technical Analysis

The British pound has fallen during trading on Thursday as the Bank of England raised interest rates by 50 basis points. The market seems to be punishing the British pound based upon fears of inflation in that country, which of course would have a lot of negativity priced into it due to that inflationary problems. Furthermore, you have to worry about the global situation, as long as we have so much negativity out there, there will be demand for US dollars.

The 1.20 level underneath will certainly be a target, but if we break down below there, we could reach down to the area we bounced from, in the region of the 1.18 level. If we were to break down below there, then the British pound will almost certainly go looking to the 1.16 level underneath that, and then possibly the 1.15 level.

Just above, the market tested the 50 Day EMA during the session but then felt rather hard. The 50 Day EMA is an area that seems to be important over the last several months, so the fact that we pull back from there should not be a huge surprise. Given enough time, I believe that we will eventually see that indicator drawn and offer resistance as well.

Keep in mind that the Friday session is the Non-Farm Payroll announcement, and that will have major influence as far as volatility is concerned. If the number comes in rather hot, it could have more money flowing towards the US dollar as people worry about the Federal Reserve becoming as hawkish as they have quite frankly been telling everybody to begin with.

GBP/USD Price Forecast Video for 05.08.22

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