GBP/USD Forecast: British Pound Drops to All-Time Lows – 27 September 2022
This type of volatility is extraordinarily dangerous, and therefore the most important thing you can do is keep an eye on is your position sizing.
These are extraordinarily dangerous moves, which are rarely seen in the currency markets. At this point, I would not be a buyer of the British pound. Yes, I know a lot of people will look at the market and go on and on about how it ended up forming a hammer, but all this is going to be is a bit of a bounce that you can take advantage of. The fundamental situation in both the United Kingdom and the United States has not changed, even though the world lost its mind there for a minute. There are a lot of concerns when it comes to the United Kingdom that are not going to be going away anytime soon, and therefore you need to look at it through the prism of a complete disaster just waiting to happen.
For what it’s worth, we did touch an all-time low during the session, and then bounced quite drastically. I suspect at this point it would take a lot of wherewithal to hang on to long positions, which is something that I would not be a fan of in this environment. I believe the US dollar will continue to strengthen, but it is probably worth noting that the volatility has probably wrecked a lot of accounts, so whether or not we can keep up this type of momentum is a completely different question altogether.
I said this about a week ago, that we could go to parity. That is still very much in the cards at this point, which is something that I never thought I would say when it came to this currency pair. In fact, we have never seen it, so that tells you pretty much everything you need to know about the situation. The Bank of England is tightening into a slowdown that everybody in the world sees but them.
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