GBP/USD Price Forecast – British Pound Continues to Struggle With 1.35

The British pound had rallied quite significantly during the last two weeks of December, but one has to wonder whether or not there was a certain amount of short covering going on? Nonetheless, we find ourselves at the beginning of a new year and as a result new attitudes prevail. The 1.35 level has been important multiple times in the past, and it certainly looks as if we are putting up a fight here. Whether or not the market can overcome this barrier is a completely different question but with the jobs number coming on Friday, it is possible that might be the catalyst.

GBP/USD Video 05.01.22

As you can see, the 50 day EMA sits just below, and is curling higher. Because of this, I suspect there will be a certain amount of upward pressure, but when you look at the longer-term chart, we are still very much in a downtrend, despite the fact that this has been such a huge move to the upside. All things been equal, I think this 1.35 level is going to be a major level of decision, so be interesting to see how we break out. If we do get above the 200 day EMA, that will get rid of all downs, and this pair will end up going much higher. However, if we turn around a break down below the 50 day EMA is very likely that we could see this market drop towards the lows again. We are simply being squeezed at the moment, meaning eventually we will have to pop out on one end or the other.

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