GBP/USD Forecast Today -09/01: British Pound Falls (Video)

(MENAFN- Daily Forex)

• It's worth noting that the British pound has pierced the 1.2350 level.
• Breaking down below there is a very negative turn of events, but we have held on to that order to show signs of resiliency.
• Ten-year yields in America continue to spike, and that, of course, continues to drive the value of the U.S. dollar higher.

With that being the case, and the fact that the United States is the only place you're seeing, like, along the lines of a strong economy when it comes to the majors, it makes sense that the U.S. dollar continues to be the only game in town.

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Selling Short Term Rallies

Short-term rallies I think are selling opportunities and it's worth noting that the previous daily candlestick was a shooting star and not only the British pound against the US dollar but the Australian dollar, the New Zealand dollar, etc. Now, I do think if the yields drop a bit, then it's likely that we could bounce a little bit from here but I think that the 1.25 level offers resistance.

Keep in mind that we have a jobs number on Friday, and that of course has a major influence on what happens with the US dollar. But right now, the bond market is in control, and nobody cares what the Fed thinks. As long as that's going to be the case, the US dollar is going to move right along with the 10 year yields and other markets. If we continue to see yields rise, people want dollars, it's that simple. Think of it this way, most debt in the world is denominated in dollars and you have to pay back quickly. If you can, that requires dollars. Furthermore, why take an asset that's depreciating against the dollar when you can just flip it for dollars? So, it's kind of a feedback circle.

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