GBP/USD Forecast -British Pound Getting a Bit Stretched

GBP/USD Forecast Video for 28.11.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied during the Monday trading session but gave up gains rather quickly to show signs of hesitation. That’s not a huge surprise, considering that we are a bit overstretched at this point. Ultimately, I think this is a situation where the market is probably getting ready to do a little profit-taking, and therefore more of a “buy on the dip” strategy may come into play. That being said, you should also keep in mind that the 50% Fibonacci level is in the same general region, so therefore a lot of traders will be paying close attention to that.

If we were to break above the top of the candlestick for the trading session on Monday, that opens up a move to the 1.2750 level. I think that could be a target eventually, but also keep in mind that we more likely than not will have to drop enough to attract buyers back into the market. After all, traders will want to find a bit of value going forward.

With this type of momentum, we almost certainly will get some type of pullback, and then traders will start to focus on the 1.25 level underneath, they could offer a lot of support due to the fact that it is a large, round, psychologically significant figure. That of course is something that always carries a bit of weight in the market, so with that being the case, I would anticipate some type of reaction. Furthermore, just below there we have the previous trendline that should still have a bit of “market memory” attached to it.

The question now is whether or not the Bank of England will continue to raise rates, and of course whether or not the Federal Reserve is going to loosen its monetary policy going forward. There a lot of traders out there who think they will, so therefore we are starting to see the US dollar take a little bit of a hit. That being said, markets don’t go in one direction forever, so this pullback would make a certain amount of sense. Ultimately, look for value, and then take advantage of it if you get the opportunity.

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