GBP/USD Price Forecast – The British Pound Has Pulled Back

British Pound vs US Dollar Technical Analysis

The British pound has pulled back a bit during the trading session on Tuesday as Americans came back to work from Memorial Day. At this point, it looks like we may make a move down to the 1.25 handle, an area that will attract a lot of attention as it is a large, round, psychologically significant figure. If we were to break down below the 1.25 handle, then it will verify that the downtrend is very much intact, and we will continue to go lower to reach the 1.22 level. If we break down below there, then it’s like a trapdoor that will allow this market to fall pretty significantly.

Ultimately, this is a market that has had a nice bounce, but it is looking more like a “bear market rally” during the day on Tuesday. The 50 Day EMA sits just above and is sloping lower. At this point, the market is likely to continue seeing selling pressure. Especially if we get more risk aversion, as it will drive demand for the US dollar much higher.

Alternatively, if we were to break about the 50 Day EMA, then it’s likely that we would see the British pound rally quite a bit, perhaps going as high as the 1.30 handle. The 1.30 level was an area where we had seen a lot of support previously, so a bit of “market memory” comes into the picture and it could cause potential resistance. If we break above there, then you can start to talk about the trend change. Until then, you still have to look at rallies as being suspicious, and perhaps opportunities to pick up “cheap dollars.”

GBP/USD Price Forecast Video 01.06.22

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