GBP/USD Price Forecast – British Pound Pulls Back Slightly

The British pound has initially tried to rally during the day on Friday but gave back some of the gains in order to show signs of weakness. That being said, the market is still very much in a consolidation area so therefore I am not necessarily looking to get overly bearish at this point in time, nor am willing to jump in with both feet and start buying. The 200 day EMA sits above at the 1.36 level, just as the 50 day EMA underneath sits at the 1.3450 handle.

GBP/USD Video 10.01.22

We are currently being “squeezed” between the two moving averages, and I think that is probably the best way to look at this market, due to the fact that we have seen so much in the way of explosive upward pressure, but when you look at the chart from a longer-term perspective, we are still very much in a downtrend. That being said, there are a lot of questions about the US dollar and what about to happen so of course you need to be cautious about what we are going to do as far as interest rates are concerned in the United States, as they have been rising due to the Federal Reserve talking about a potential of at least three interest rate hikes this year.

That makes the US dollar more attractive, so that may continue to weigh upon this market. However, once we get a breakout of one of the moving averages, then I think it is probably more likely than not that we will simply go in that direction for a while.

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