- The British pound initially did try to rally a bit during the trading session on Thursday, but we've seen quite a bit of selling since then.
- And it looks like we are just simply hanging around in order to show signs of hesitation.
- But ultimately, I think if we do break down below the bottom of the candlestick for the trading session here, we could plunge towards the 1.3250 level.
- Keep in mind that Friday features the Jackson Hole Symposium speech by Jerome Powell and that will have a major influence on what people expect the Federal Reserve to do and of course what the US dollar will be doing.
Ultimately, this is a market that I think if you do rally a bit here, I'm looking for signs of exhaustion to take advantage of at least until we break above the 1.36 level. If we break down from here, then again, I believe that the 1.3250 level is a floor in the market. And then after that, have the 200 day EMA near the 1.3175 level. Ultimately, I do expect to see a lot of noisy behavior. And I do think that the US dollar is going to move in the same direction against most currencies, whether it be the British pound, the euro, the Canadian dollar, or whatever.
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Sterling Has Been Strong Overall
The British pound has been one of the stronger currencies out there. And I think it is a situation where traders are benefiting from British pound strength in both directions, meaning that even if the British pound were to start falling against the US dollar, there's a really good chance that it won't fall as hard as the euro, for example.
That was the case all last year. And I think as we rallied against the US dollar, the British pound was an outperformer recently, we've seen some lower highs though. And it does look like it's running out of momentum. Remember, there's a lot of questions out there at the moment. But it looks like it wouldn't take much to knock this over and have it go tumbling.
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