GBP/USD Forecast – British Pound Hesitates at Resistance

GBP/USD Forecast Video for 11.10.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the trading session on Tuesday, but it seems that have quite a bit of resistance right around the 1.23 reason, and then again at the 1.2350 level, which has a lot of market memory. We recently had the market bounce a bit, and therefore it does make a certain amount of sense the short sellers might come back in. We also have the 50-Day EMA breakdown below the 200-Day EMA, forming the so-called “death cross.” Ultimately, this is a situation where I think it is only a matter of time before sellers come back in due to the negativity.

Underneath, the 1.20 level has offered a significant amount of support, and I think at that point, the market will be looking for signs of momentum to break through there eventually and go looking to the 1.1850 level. The 1.1850 level is almost certainly going to be a major area as we have seen in the past, and therefore I think it does hold, at least for the time being. Anything below there could open up the floodgates and it would signify major problems in the financial market.

If we could break above the 1.2350 level, this is a market that could then go higher, testing the moving averages. If we can break above the moving averages, then it’s possible that we would start to enter a long-term uptrend, but quite frankly this is a market that has to worry about the bond market, and therefore you need to pay close attention to the yields and the 10 year note, as it is the benchmark that most people pay close attention to.

The 10 year note seen rising yields will work against the British pound, or perhaps put more simply, work for the US dollar. I do believe that continues to be an issue, and as the UK has to worry about the European Union and a potential recession, it does make a certain amount of sense that the US dollar will continue to outperform the British pound. Having said that, we are little oversold and therefore I would expect a lot of noisy behavior. Inflation numbers coming later in the week will of course have a major influence on the greenback as well.

For a look at all of today’s economic events, check out our economic calendar.