GBP/USD Price Forecast – Sterling Continues Its Slide

British Pound vs US Dollar Technical Analysis

The British pound has dropped a bit during the trading session on Wednesday, but it is still waiting to see what Jerome Powell has to say. The 1.15 level above is a major resistance barrier that I think will be difficult to take out, unless of course there is some huge policy change coming from the Federal Reserve. It seems very unlikely for that to happen anytime soon, so I think we have more or less a “fade the rally” type of situation here, just as we do in multiple other USD-denominated currency pairs.

The 50-Day EMA sits at roughly 1.18 and is dropping rather quickly. This is an indicator that has been fairly reliable all year, so one would have to think that there’s a little bit of “market memory” priced in at this point. It could end up being very much like a downtrend line. That being said, if we were to break above there it would obviously be a very bullish sign but I just don’t see the catalyst to make that happen. The UK economy is in such bad shape with energy that the government has had to come up with a 45 billion GBP bailout plan for businesses to keep them solvent.

Ultimately, the US dollar is going to continue to be like a wrecking ball for everything out there, and I just don’t see how the British pound is anything different. This does not necessarily mean that we go straight down, because quite frankly we are at very extended levels. However, anytime you get a chance to pick up cheap dollars, you might want to do so.

GBP/USD Price Forecast Video for 22.09.22

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