Superior broker technology provider since 2010
+1 (315) 675 1086 |

GBP/USD Forecast: Sterling Continues to Selloff


At this juncture, the market looks very likely to continue being bearish, but you may have to go down to short-term charts for entry signals.

The British pound had a horrible session during the day on Thursday, as the 1.26 level has offered massive resistance. The turnaround after the Federal Reserve meeting is short-lived, to say the least, as we have broken down quite drastically. Ultimately, this is a market that I think will continue to go lower based on the size of this candlestick, and of course, the fact that we are closing towards the very bottom of the range. If we break down below the bottom of the candlestick, then it means that we should see plenty of momentum in this market so that it goes much lower.

Keep in mind that the US dollar continues to be the strongest currency that I follow in general, and I think that the British pound is not going to be able to put up much in the way of a fight against it. The Bank of England is looking to keep quite a bit of the asset on its balance sheet, unlike the Federal Reserve, which is looking to run those balance sheets down. This does favor the US dollar and the monetary tightening policy will continue to be the main driver. At this juncture, I think that a breakdown below the 1.25 level signifies that we are going to go down to the 1.23 handle, perhaps even down to the 1.22 level. With that being said, I would expect a short-term rally, but that rally will almost certainly be sold into.

I have no interest in buying this pair obviously, but if we were to turn around a break above the highs of the last two days, it would be a very bullish sign, perhaps opening up the possibility of a move to the 50 Day EMA. The 50 Day EMA is an indicator that a lot of people pay attention to, especially as it is now crossing below the 1.30 level. At this juncture, the market looks very likely to continue being bearish, but you may have to go down to short-term charts for entry signals. Those signals continue to be an invitation to get US dollars “on the cheap”, which is exactly the environment we have been in for a while. Ultimately, I do not see how this changes anytime soon, especially as the Federal Reserve is going to do a couple of 50 basis point rate hikes in a row.



Leave a Reply

Your email address will not be published. Required fields are marked *

YourOwnBrokerage is a leading Technology & Business Consulting firm with a specialized focus in Fintech industry.

RISK WARNING: Trading products are highly speculative in nature and carries a significant level of risk which may not be suitable for all investors. Please ensure you fully understand the risks involved and only invest money you can afford to lose. Seek advice from an independent adviser if at all unsure as to the suitability of investing in such instruments.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

The information on this website is not directed to residents of certain jurisdictions where such distribution or use would be contrary to local law or regulation.

© 2009 - 2024 All Rights Reserved.