GBP/USD Price Forecast – British Pound Has Wild Ride for The Day

Published: Oct 13, 2022, 14:13 UTC•2min read

The British pound initially rallied as the rumors hit the wires that the British government was going to reconfigure its tax scheme. However, CPI numbers in America came out twice as hot as expected.

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GBP/USD

+0.37

British Pound vs US Dollar Technical Analysis

The British pound has rallied rather significantly early during the trading session as it was rumored that the British government was going to reconfigure its tax scheme, which had caused quite a bit of selling as of late. However, we have also had the CPI numbers in the United States twice as hot as anticipated, and therefore the US dollar picked up a lot of strength. With this being the case, it does make quite a bit of sense that we would see major volatility, which is nothing new for this pair.

Ultimately, it’s all about the US dollar and what the Federal Reserve is doing. As it’s obvious that the Federal Reserve is going to be forced to stay tight, the US dollar will continue to be the main beneficiary. With that in mind, I believe that you continue to sell the rallies at the first signs of exhaustion, as that trait has worked out quite nicely for some time. Ultimately, I do think that we probably break back down to the lows, and then down to the parity level given enough time.

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I do expect a lot of noise near the 1.05 level, but ultimately that will get broken through if the economic situation does not change rapidly. I don’t see that happening, so therefore it’s very likely that we will continue to see volatility but more of a downward slant than anything else. I have no interest in trying to get too cute with this, I recognize that the situation is precarious at best.