GBP/USD Price Forecast – British Pound Recovers After Initial Dip

British Pound vs US Dollar Technical Analysis

The British pound has pulled back a bit during the trading session on Thursday, showing signs of negativity, only to turn around and rally again. At this point, I think we are in the midst of a nice recovery for the British pound, but that does not mean that the trend has changed. For those willing to be countertrend traders, I can see what you can see as well, and it would not surprise me at all to see this market bounce above the 1.10 level.

That being said, I will meet you on the other side. I am more than willing to short this market at the first signs of exhaustion, especially on a daily chart. It might be the 1.10 level, but it could be as high as the 1.13 level. Quite frankly, the higher we go, the more likely I am to sell this market. I understand that the Bank of England is trying to do something, but quite frankly the situation is self-defeating in the sense that they are buying bonds to drive down yields but raising yields simultaneously.

Quite frankly, I think this is just another example of things breaking around the world, as a US dollar is going to swallow almost everything. I believe that the possibility of the British pound reaching parity has increased lately, and this bounce is simply going to be yet another relief rally.

If we were to break above the 1.15 level, and by extension the 50-Day EMA, we may have something a little bit more substantial. That being said, I don’t see that happening easily, so I’m not interested in going along until that bare minimum has been reached. I understand that a lot of people will look at that and say that it is 7 handles above, but if it is a trend change, we could find ourselves all the way back up to the 1.50 level eventually.

GBP/USD Price Forecast Video for 30.09.22

For a look at all of today’s economic events, check out our economic calendar.