British Pound vs US Dollar Weekly Technical Analysis
The British pound has fallen rather hard during the week to reach the one area. This is an area that will continue to cause quite a bit of noise, but quite frankly I think this is a scenario where we have to be very cautious about trying to buy any type of dip because quite frankly this is a market that looks like it is about to fall apart. Rallies will almost certainly appear, but they should be thought of as opportunities to pick up “cheap US dollars.”
If we break down below the low of this past week, it is likely that we go looking to reach the 1.2250 handle. Rallies at this point will more than likely see a lot of resistance at every major handle, and the 1.30 level above will almost certainly be a major contributor to resistance. It is not until we break above the 1.30 level that I would think there is a real chance to change everything. In fact, we are starting to form the so-called “death cross” on the weekly chart, something that most certainly will attract a certain amount of attention. Because of this, I think it is probably only a matter of time before traders will have to focus on just how low the British pound can go.
The Bank of England is going to keep its balance sheet full and is not selling off assets. This is the first sign of a potential dovish turn, and you can see what this has led to. At the same time, the Federal Reserve looks to be extraordinarily hawkish, and therefore it is difficult to imagine a scenario where you can bet against the greenback.
GBP/USD Price Forecast Video 02.05.22
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This article was originally posted on FX Empire
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Source: https://finance.yahoo.com/news/british-pound-tough-week-150126825.html