GBP/USD Forecast – British Pound Bounces

GBP/USD Forecast Video for 16.08.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Tuesday, as it looks like we are trying to break above the 50-Day EMA. That being said, the market is likely to continue seeing a lot of noisy behavior, and therefore you need to be somewhat reasonable with your position sizing, but it is worth noting that the British pound has been in an uptrend for quite some time against the US dollar, while the last 2 weeks have simply been consolidation.

Because of this, I think you’ve got a situation where you need to pay close attention to the overall risk appetite of traders around the world, but I do think that it is probably only a matter of time before they choose to get long of the British pound again. If and when they do, we could see a huge move, but right now it doesn’t look like we are quite ready to take off. Breaking above the Thursday highs of last week would be the first sign of real strength, and in that environment, I suspect that this is a market that will then have an opportunity to get to the 1.30 level above. In that environment, it’s likely that we will eventually break out.

Underneath, there is a major uptrend line that a lot of traders will be paying close attention to, so watch that, and of course the 200-Day EMA in the same general vicinity. Breaking through all that would of course be very negative, but I just don’t see that happening anytime soon, recognizing that the overall attitude has remained the same, and therefore despite the fact that it has been rather noisy and sideways as of late, nothing has truly changed and it looks as if the British pound continues to be one of the favorite currencies around the world. Position sizing should be somewhat reasonable, as this choppy behavior can cause a lot of headaches for traders if they aren’t very careful, and you should also keep in mind that it is the midst of holiday season right now for most major trading firms, so big moves aren’t necessarily in the cards over the next couple of days.

For a look at all of today’s economic events, check out our economic calendar.