GBP/USD Forecast – British Pound Bounces After Initial Selloff

GBP/USD Forecast Video for 06.09.23

British Pound vs US Dollar Technical Analysis

The British pound fell a bit during the trading session on Tuesday, as a lot of volatility came back into the market. We are sitting above the 200-Day EMA, so it will be interesting to see if it holds. If it does, that could be a very good sign for the longer term trend. Breaking above the 50-Day EMA would be a very bullish sign and could send this market much higher. At that point, the market could go look into the 1.30 level above. The one 1.30 level of course is a large, round, psychologically significant figure.

The 200-Day EMA underneath of course is a major indicator that a lot of people pay close attention to, and therefore I think it could be setting up for a bigger move. At this point, if we break above the 1.2650 level, then it shows that we are going to challenge the 50-Day EMA. On the other hand, if we were to break down below the 200-Day EMA the market could go down to the 1.2350 level.

In general, this is a market that is looking to see where the US dollar is going to go overall, but keep in mind that the British pound has been a bit stronger than most other currencies, so therefore I think we could see the US dollar strengthened while the British pound does fairly well against it. All things being equal, this is a situation where we probably see a lot of volatility, but as traders come back from the vacation season, it will have a major influence on where we go next, as money goes flying into the market.

Because of this, I’d be very cautious with my position sizing, but once we break above the 50-Day EMA, I would be much more comfortable about adding to a long position. On the other hand, if the British pound were to drop down below the 1.2350 level, then it’s likely going to be a very negative turn of events and therefore you would probably see the US dollar basically swallow everything, including the British pound. It does look like the buyers are trying to fight back though, so it’ll be interesting to see how the next couple of days play out.

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