The British pound initially rose during Thursday’s trading session, but gave back its gains fairly quickly as it approached the 200-day EMA. That being said, the market seems to be struggling to find some short-term clarity as we squeeze between the 50-day EMA and the 200-day EMA. That being said, CPI numbers in the US are extraordinarily hot, which generally means traders will be considering the Federal Reserve tightening monetary policy more aggressively. This should end up being positive for the dollar.
GBP/USD Video 11.02.22
If we can break below the 1.35 handle below, it could open up further selling, possibly sending this market towards the 1.34 level quite quickly. All things being equal, I think that’s probably what’s happening, but obviously we have a lot of support in that general neighborhood. On the other hand, if we reverse a break above the 200-day EMA, then we could turn to the 1.37 handle, but that should be accompanied by US Dollar weakness overall. . I would look around the world and see what the US Dollar is doing if I was thinking of buying this pair, and if you don’t see widespread weakness, you probably want to avoid this trade. Either way, I think you can expect a lot of volatility going forward.