GBP/USD Forecast: Has a Wild ride as BOE Grabs Headlines – 29 September 2022
Regardless, this is a market that will eventually run out of momentum, as the US dollar has been like a wrecking ball, but it is overbought.
The Bank of England stepped into the marketplace and started a bond buying program during the trading session on Wednesday in a bid to drive yield down. Ironically, that’s rather negative for the GBP/USD overall, but the fact that the Bank of England is at least going to step in and do something probably causes for a little bit of relief.
We are still very much in a downtrend, and I think that any bounce that we get here is to be looked at as suspicious, therefore I will be more than willing to fade signs of exhaustion after a move to the upside. The 1.15 level above I think is the “ceiling in the market”, but you should also pay close attention to the fact that the 50-Day EMA is in that same area. Regardless, this is a market that will eventually run out of momentum, as the US dollar has been like a wrecking ball, but it is overbought. Ultimately, this is a situation where we would see any bounce attract the attention of those who are longer-term thinkers, and therefore I think that this probably could be a nice opportunity.
The candlestick for the trading session on Wednesday looks as if it is going to form a hammer, which is the same thing that it formed on Monday.At this point, I’m just simply going to step to the side and look for an opportunity to get short yet again.The 1.05 level underneath could be a significant support level, and an area that will attract a lot of attention.Once we break down below the 1.05 level, it will open a move down to the parity level. We have seen this movie before, but in the EUR/USD pair.
We bounced a bit from the major level underneath, grind it a little higher, and then fall again. I think that’s going to be the case yet again. Yes, there’s a little bit of a relief move during the day on Wednesday, but now when you look at the longer-term trend, it’s nothing but a small blip on the radar. This is a situation where market participants are simply taking profit as they trying to reassess the situation in the United Kingdom.
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