GBP/USD Price Forecast: A Fall to $1.2265 Brings sub-$1.21 into Play - FX EMPIRE
JUNE 22, 2022
It is a quiet day ahead on the UK
economic calendar, with no stats to provide the Pound with direction.
The lack of stats will leave the markets to consider various factors in the wake of the Fed and BoE monetary policy decisions.
With the Fed likely to stick to its guns on a more aggressive rate path to curb inflation, monetary policy divergence remains in the dollar’s favor.
While there are no stats to consider, central bank chatter could draw attention later this morning.
The chief economist of the Bank of England, Huw Pill, and monetary policy committee member Silvano Tenreyro are due to speak at the Bank of England Workshop on
Household Finance and Housing.
Any chatter in inflation and monetary policy will influence the Pound, which has struggled this morning.
GBP/USD Price Action
At the time of writing, the Pound was down by 0.62% to $1.22721.
A mixed start to the day saw the Pound rise to an early morning high of $1.23602 before falling to a low of $1.22677.
The Pound left the Major Support and Resistance Levels untested early on.
GBPUSD 170622 Daily Chart
The Pound will need to avoid the $1.2265
pivot to target the First Major Resistance Level at $1.2490.
A pickup in market risk appetite would support a breakout from the Thursday high of $1.24059.
An extended rally would test the Second Major Resistance Level at $1.2630 and resistance at $1.2650.
A fall through the pivot would bring the First Major Support Level at $1.2124 into play.
Barring another extended sell-off throughout the day, the Pound should avoid sub-$1.21. The Second Major Support Level sits at $1.1900.
GBPUSD 170622 Hourly Chart
Looking at the
EMAs and the 4-hourly candlestick chart (below), it is a bearish signal.
At present, the Pound sits below the 50-day EMA, currently at $1.22926. The 50-day EMA flattened on the 100-day EMA. The 100-day EMA eased back from the 200-day EMA: Pound negative.
A move back through the 50-day EMA would support a breakout from the 100-day EMA, currently at $1.23751, to bring the Major Resistance Levels into play.