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GBP/USD Forecast: British Pound Breaks Down Even Further – 14 March 2022

I will be looking for signs of exhaustion in order to take advantage of what is a very strong trend in favor of the greenback.

The British pound initially tried to rally on Friday but gave back gains as we continue to plummet. That being said, I think the market is more likely than not going to continue to go towards the 1.30 handle, an area that will attract a lot of attention due to the fact that it is a large, round, psychologically significant figure, and it is also an area that has been important in the past.


Keep in mind that the US dollar continues to attract a lot of attention due to a safety bid, and there are plenty of things out there that could cause markets to go looking for safety. The Ukraine war is the first thing of course, but we also have to worry about growth in general. Great Britain is becoming a little less hawkish than they once were as far as monetary policy is concerned, so that could have a major effect on what happens here as well.

I do not know that this is necessarily a major indictment on the British pound more than it is an indictment on how people are looking to get back into the greenback. US Treasuries have attracted a certain amount of attention as well, and as long as interest rates continue to favor the US dollar going forward, that will certainly have a major influence on what happens next.

If we break above the highs of the Friday session, then it is possible that we could go looking towards the 1.32 handle bone, which is an area that caused resistance previously. This is an area that has not only been resistant over the last couple of days but was major support at the end of last year. That is an area that I think makes a perfect setup for a shorting opportunity, assuming that we even get the opportunity. This pair has already done that, and I think we are more than likely going to not only go looking towards the 1.30 handle, but perhaps even lower than that. If we do break down below that level, then the next target will be the 1.28 handle.

Rallies at this point simply will not be attractive to me, and I will be looking for signs of exhaustion in order to take advantage of what is a very strong trend in favor of the greenback, not only against the British pound but against currencies around the world.

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