GBP/USD Forecast – British Pound Pulls Back After Initial Rally on Wednesday

GBP/USD Forecast Video for 22.06.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the trading session on Wednesday but then gave back gain rather significantly. At this point, the British pound may try to reach down toward the 1.2650 level, an area that has been important previously. This is previous resistance, and the fact that we have broken above there suggests that we should see a certain amount of support if we pull back to that level.

It’s also worth noting that the 50-Day EMA is racing toward the same area, so it does make a certain sense that we would see that perhaps offer a bit of support also. All things being equal, I think we are looking for support underneath, and the fact that the Bank of England has an interest rate decision on Thursday also has a lot to do with what we are seeing. If they sound very hawkish, that could be the catalyst to send this market higher. While the Federal Reserve remains tight, the Bank of England seems to be believed to be even more hawkish.

All things being equal, this is a market that is going to be difficult to start shorting anytime soon, so I think you have to look at this pullback as either buying opportunity or just something you get away from. The British pound has been one of the better performers against the greenback all year, and I don’t necessarily think that’s going to change anytime soon, but if we get a huge run toward the US dollar, then we might see quite a bit of damage to this pair.

That being said, you are probably better off shorting other currencies against the greenback, just due to the fact that the British pound has been so strong for so long. All things being equal, this is a pair that I think is simply looking for support at a lower level, and that might happen once we get through the Bank of England announcement and statement. Expect volatility, but don’t get too aggressive until we get through that issue.

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