Long-term Overselling Fears Might Form GPBUSD's Next Historical Lows

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The Sterling might yet to find a footing against an ever more hawkish Greenback on a day to day basis!

If I were to diagnose GBPUSD's health right now, definitely, it is not feeling well based on what I'm seeing.

This analysis is more of a forecast than a signal as I'm trying to escalate what is going to happen with the Cable's price action against the unstoppable Greenback.

Although that was the intended case, any short-term trading plans can still be made based from these findings that I'm going to uncover.

Last Friday, I have witnessed one of the nastiest price volatilities in my Forex markets' observations.

The news was heavily sold in US dollar's favor. Markets reacted in a volatile fashion. USD bear pairs feasted upon Chair Powell's recent Jackson Hole's speech declaring they won't stop until the inflation is tamed!

Escalating Fed's additional 75 basis points making a total of 2.50% interest rate is a convincing stomping of feet against all USD trend reversal odds.

Greenback's rival currencies have no other way but to endure more bearish nosedives ahead.

At the time of writing this article, the DXY index printed a fresh multi-year high by intraday's upside outburst. The Greenback have entered levels that were never seen since October 2002 and already marching towards September highs of the same year.

Looks like the major rivals including the British Pound are going to extend their bear markets against the dollar respectively.

With the Euro's continued weakness, another Forex major currency needs to step up and challenge the king dollar! That could be the Aussie as it looks like it has some cards to fight back.

The Sterling's deteriorating health at the moment is clearly out of the picture to fight the dollar.

After a fresh swing low printed Tuesday last week, that could have been the long-term bearish continuation sign if short sellers paid more attention but no one have thought that might be only few.

Should GPBUSD ended its previous week's candle in green, specifically a hammer after the fresh swing low print, that could have supported the sudden upswing on Friday's trading and then we have the right to call that was the bottom.

Instead the reverse happened! Big thanks from the Fed's Chair more hawkish tone in his Jackson Speech the same day. With USD's next instance target to seek more value around September 2022 levels, the previous week high might be GBP's pinnacle and the last valuable price against the former for many weeks, months or years to come. Who knows!

On the other hand, noting Greenback's recent peak into consideration, it may commence a quick pullback or more correction time before next leg upward as August comes to a close.

Fed will continue to push higher interests at all cost putting any GBPUSD bullish bias in jeopardy.

What I'm looking for is a pattern that will potentially lead GBPUSD into its next historical third higher low based on connecting the February 1985 and March 2020 monthly bottoms.

I bet a long entry at 1.1483 as it intersects well inside the third HL buy zone, this can take a lot of time to be hit but can be worth the wait. A continued surging US dollar and a strong market volatility would support this scenario!

Just in case this long plan be triggered, I give a 300-pip take profit to 100-pip stop loss risk management. A 3:1 RR score.