GBP/USD Forecast Today - 22/01 British Pound Continues

(MENAFN- Daily Forex)

• You can see that things have been very noisy during the trading session on Tuesday, and the noise will continue to be a major factor overall. Volatility is going to be high because Trump is out there talking about tariffs already, and of course, traders have no idea what to do with this.
• The technical analysis for this pair, of course, is very negative, and it looks at this point in time as if we could see a little bit of a bounce, but that bounce very well could see a lot of resistance again at the 1.2350 level and then following that at the 1.25 level. Despite the fact that we've seen a nice recovery during the trading session on Tuesday, I don't really have any interest in buying this pair, and I think a bounce at this point will only offer a selling opportunity. I mean, that's been the case all along.

Taking Stock of the Situation

When you look at where we are at, we are at a significant low over the last couple of years, but there's really no reason to believe, at least at this point in time, that the British pound recovery is going to be something that sticks. Quite frankly, we would have to have something happen with the US dollar, and we just aren't there yet.

So, with that being said, I look at rallies as shorting opportunities at the first sign of exhaustion, but I also recognize that we're oversold, so this is probably something that we'll have to watch over the next couple of days and take advantage of if and when that exhaustion candle appears. If we were to break above the 50-day EMA, then we can begin to think about a trajectory higher, but we would also have to see the US dollar losing strength.

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