GBP/USD Forecast Today 22/5: Resistance Ahead Of CPI (Video)
Date
5/22/2024 2:56:59 PM
(MENAFN- Daily Forex)
The British pound has been somewhat noisy during the trading session, as we initially dropped to, only to turn around and show signs of life again. Ultimately, this is a market that I think will eventually try to break higher and reach the 1.28 level. However, it is worth noting that CPI numbers are coming out of the United Kingdom on Wednesday, and that will have a major influence on what happens next.
With this being the case, I think you've got a situation where traders continue to see this as a market that is probably more or less short term base than anything else. So I think you have to be extraordinarily cautious. With that being said, position sizing will be crucial as you could find a bit of trouble if you get overextended.
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What if we drop?
If we do break down below the 1.2650 level, then it opens up a move down to the 50 day EMA . Possibly even the 200 day EMA. If we were to break above the 1.28 level, then it opens up the possibility of a complete retracement of this sell off, which is closer to the 1.29 level above. But I think that probably gives way to 1.31 over the longer term .
GBP/USD is a pair that is looking for its range for the year , and I do think we're closer to the top than the bottom. But the CPI numbers obviously can have a major influence on what happens over the next several sessions. So do be aware of that. Choppy behavior is probably the norm here, and I do think that the 1.28 level is going to be a fairly significant and important resistance barrier that is worth paying attention to. Anything above there gets interesting, and it could cause quite a bit of volatility. If we see the US dollar drop in general, that may be what happens but at the same time there are a lot of concerns out there that could have money running right back to the United States.
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