- The British pound initially rallied during the trading session on Thursday, but it looks like we just don't have any follow through and now we find ourselves hanging around the 1.35 level again.
- This is a market that is getting choppier and quite frankly sloppier day by day.
- We have seen the US dollar really start to fight other currencies as of late and the British pound won't be any different.
If you look at some of the other major currencies, it’s almost as if we just don't have much in the way of serious conviction one way or the other. It is interesting that the 1.35 level comes up time and time again and I do think it will remain a very important part of your analysis.
Top Regulated Brokers
Economic Pressures and Long-Term Outlook
The 1.35 level has been both support and resistance multiple times and with that being said, the market is likely to continue to see volatility more than anything else. I believe that this is a market that will continue to be noise and chop, but it is worth noting that the economic numbers in the United States have been stubbornly inflationary and strong, thereby maybe making things a little bit more difficult for the Federal Reserve.
What was once thought of as a series of interest rates coming back-to-back, the reality is that the US economy is a lot more nuanced than that. At the same time, we also have the Bank of England narrowly choosing to remain on hold the last meeting and at this point I think you've got a situation where the Bank of England is going to start cutting and perhaps, we will see some weakness in the pound.
When you zoom out to a longer-term chart, we are in an area that historically has been somewhat troublesome going all the way back to 2018. At this point, this pair is looking more and more negative, but I don't think it collapses necessarily. I think we continue to see more of a fade the rally.
Ready to trade the Forex GBP/USD analysis and predictions? Here are the best forex trading platforms UK to choose from.