British Pound vs US Dollar Technical Analysis
The British pound has gone back and forth during trading on Wednesday as we continue to see a lot of back and forth in this general vicinity. The 1.2350 level is an area that has attracted a lot of attention, so therefore it is not a huge surprise to see that we are still stuck in this range. Ultimately, I think this is a market that will find plenty of resistance above, so I am more or less looking at this as a “sell the rallies” type of situation. I would be especially interested in the area just above the 1.25 handle, which is a large, round, psychologically significant figure and an area where we have seen a lot of noise in the past.
It is not until we break above the 1.26 level that I think the British pound has a shot at rallying for a bigger move, but even then, I am not sold on owning the pound until we break above the 1.30 handle. There is a lot of real estate between here and there to overcome to make that feasible, so at this point, I think it is probably more likely than not that we are going to see plenty of resistance above and exhaustion that we can take advantage of.
Signs of exhaustion will be sold, and I do believe that it is only a matter of time before the US dollar overpowers the British pound yet again. With the higher than anticipated CPI numbers coming out on Wednesday, that only strengthens the case from a longer-term standpoint, but it is worth noting that we are oversold at the moment.
GBP/USD Price Forecast Video 12.05.22
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This article was originally posted on FX Empire
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