GBP/USD Price Forecast – The British Pound Continues Noisy Consolidation

Christopher Lewis
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British Pound vs US Dollar Technical Analysis

The British pound has rallied just a bit against the greenback during the trading session on Thursday, as the market continues its consolidation against resistance. The 1.25 level is an area where I would expect to see a lot of resistance, and therefore it is not a huge surprise to see that we have been banging around just below it. When you look at the chart over the last several weeks, you can see that a bearish flag had set up in this general vicinity, so it should contain a lot of noise. That noise will be difficult to overcome, especially in the macroenvironment that we find ourselves in.

The yields in America have come down just a bit during the trading session, and you may be seeing that reflected in the US dollar, but that is a temporary phenomenon. Furthermore, as there is more risk out there, yields will drop as people buy US bonds. Those US bonds need to be purchased in US dollars, and it is worth noting that the Eurodollar system has a major liquidity issue in certain parts of the world, and therefore demand for US dollars continues to rise.

At this point, the resistance barrier extends all the way to at least the 1.26 handle, but you also have the 50 day EMA above that could cause a bit of resistance. It would take a massive effort to turn things around, but I suppose anything is possible. Currently, I am looking for signs of exhaustion to sell into, as it offers cheap US dollars. The market will continue to be noisy, but that is probably going to be the case with almost anything in the Forex markets.

GBP/USD Price Forecast Video 20.05.22

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This article was originally posted on FX Empire

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