GBP/USD Forecast – British Pound Bounces a Bit Heading Into the Weekend

GBP/USD Forecast Video for 31.07.23

British Pound vs US Dollar Technical Analysis

The British pound has bounced a bit during the trading session on Friday, as we have bounced from the crucial 50-Day EMA, and then of course the trendline that sits just below there. It’s worth noting that the market is trying to work against a very ugly candlestick from Thursday, so therefore I think it will get very noisy over the next couple of days. The 1.30 level above is going to be a major resistance barrier, as this is a large, round, psychologically significant figure, and an area where we had seen a lot of resistance during the Thursday session.

Underneath, the 50-Day EMA should continue to offer support right along with that trendline, but if we were to break down below there, the market drops down to the 1.2650 level underneath. That of course is an area where we’ve seen some buyers in the past, so I think it all comes together for a hard floor in the market. If we were to break down below there, then the market could drop down to the 200-Day EMA, perhaps even lower than that. All things being equal, this is a situation where I think eventually we try to get to the 1.30 level and break above there. After all, we have been in a nice uptrend for quite some time, and therefore I think it’s probably only a matter time before the market really starts to take off.

Regardless, a lot of this will come down to what people think about the Federal Reserve and inflation in the United Kingdom. Regardless, this is a situation where there is a lot of volatility, so keep in mind that the market should be approached with caution, but it’s obvious that we have a significant amount of upward momentum that should continue to come into the picture, and then, of course, we have a situation where a “buy on the dip” strategy will be preferred. Ultimately, this is the market that I think continues to be noisy, but overall you have to look at this through the prism of going long in general.

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