GBP/USD Forecast – British Pound Continues to Consolidate

GBP/USD Forecast Video for 19.07.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the trading session on Tuesday, as we have broken higher initially, but gave bacg gains rather quickly. At this point, the market looks as if it is going to be very noisy, and therefore we would have to see a lot of choppiness. All things being equal, this is a scenario where I think you have a lot of noisy behaviors, and it probably is only a matter of time to see a pullback. The pullback should be a nice buy on the dips trade as it has been multiple times in the past. The 1.30 level is probably only a matter of time before value hunters come back.

Trendline underneath will probably be respected, and I do believe that the 50-Day EMA also gives a lot of support. As long as we can stay above all that, we are still technically in an uptrend, and therefore I think you continue to look for value in the British pound, especially as traders are accepting the fact that the Federal Reserve may be dealing with lighter than anticipated inflation. In fact, retail sales came out lighter than anticipated, which of course is a huge part of the US economy.

All things being equal, it looks like the British pound will try to get to the 1.3250 level eventually, but it may take some time. With this, expect a lot of choppy behavior, but I would be looking for “cheap British pounds” at this point, because chasing the trade after this huge move higher is a great way to lose money. Ultimately, this is a market that has to at the very least go sideways in order to work off some of the excess profit, as it had gotten far too ahead of itself. This is typical market behavior, and therefore if you are patient enough you should be able to get a bit of value here, but if we go sideways long enough that may suffice as well. I would not short Sterling at this point as it has proven itself to be one of the big winners and inflation in the United Kingdom continues to outpace most other developed economies.

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