GBP/USD Forecast – British Pound Heads Toward Bottom of Consolidation

GBP/USD Forecast Video for 09.08.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen a bit during the trading session on Tuesday, as it looks like we are continuing the overall consolidation area. The 1.2650 level underneath continues to be an area of important support, so we need to pay close attention to that region. Furthermore, it’s between the 50-Day EMA and the 200-Day EMA indicators, and therefore it makes quite a bit of sense that we would continue to see support. Furthermore, you also have the uptrend line that you are paying attention to in that general vicinity, so I think it all ties together quite nicely for a potential bounce.

If we can break above 1.2785 to the upside, then the market is likely to continue to go much higher, and that might kick off the beginning of a move to the 1.30 level eventually. The 1.30 level of course is a large, round, psychologically significant figure, and an area that will attract a certain amount of attention. We are still very much in an uptrend at the moment, so I think it’s a bit difficult to get overly aggressive here to the downside, but if we were to break down below the 200-Day EMA, then it’s possible that we could see a little bit more about fall off.

Ultimately, this is a situation where we will continue to see a lot of noisy behavior, but at the end of the day, I think you have a situation where we are simply spinning our wheels, trying to figure out where we go next. The market will continue to pay close attention to the Bank of England, and the fact that it continues to shout from the rooftops that it has to fight inflation. That being said, the Federal Reserve is very much in the same boat. In other words, both of these currencies could end up being strong over the longer term, which causes a little bit of noise in this pair. That makes perfect sense for consolidation at the moment, and I think that continues to be the case, at least in the next couple of days, as I don’t see any real catalyst in the short term.

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