GBP/USD Forecast – British Pound Continues to Drift Lower

GBP/USD Forecast Video for 26.09.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen again during the trading session on Monday, as we continue to see a lot of overall negativity in the British pound, and perhaps more importantly, strength in the US dollar. The greenback is currently strengthening against almost every other currency in the world, so the British pound is going to be no different. As the market has been sold off so officiously as of late, one would assume that sooner or later there would be buyers, but those buyers will be short-lived, and I think this is a market where we continue to see a lot of “fade the rally” setups. Ultimately, I do think that this market will go much lower, perhaps reaching down to at least the 1.20 level, maybe even lower than that.

The 1.2350 level above is an area that has offered support previously, and should now offer resistance due to “market memory”, therefore it does make a certain amount of sense that we would see a lot of noise on any move toward that area. However, it’s starting to look like we are accelerating to the downside, so it’s very possible that we don’t even get that opportunity. Underneath, the 1.1850 level is an area that I think the market is trying to get to based upon the weekly charts.

Interest rate differentials will almost certainly start to favor the US quite drastically as the Bank of England has recently held its interest rate decision, and therefore a lot of traders starting to think that perhaps the United Kingdom is going to soften its monetary policy stance. The European Union is starting to show significant signs of recession, which will of course have a “knock on effect” on the United Kingdom, and that might be part of what you are seeing in the charts at the moment. Ultimately, I have no interest in buying this pair, and anytime it bounces, I think there is a good shot at dropping rather drastically and we could even see an acceleration to the downside at this point in time.

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