GBP/USD Forecast – British Pound Rallies on Thursday

GBP/USD Forecast Video for 03.11.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied initially during the trading session on Thursday, as we continue to see a lot of volatility. That being said, we are essentially hanging around in a bearish flag, and the uptrend line underneath should be a support level. If we break down below that uptrend line, it opens up quite a bit of selling, with the British pound dropping down to the 1.20 level rather quickly.

If we break down below there, then it’s likely that the market goes looking to the 1.1850 level, an area that has been massive in its support more than once. Anything below that level would send the British pound reeling and would be a sign of extreme US dollar strength.

Most traders around the world are trying to sort out whether or not the Federal Reserve is going to give them exactly what they want, which of course would be a loose monetary policy. Ultimately, we also have to pay close attention to the jobs number coming out on Friday, that of course will have a lot of people jumping on the latest headline, and trying to figure out whether or not the Federal Reserve is going to do it. Ultimately, I think that the 50-Day EMA above is going to continue to be a massive resistance barrier, which just so happens to be near the top of the flag part of the bearish flag.

The 50-Day EMA is racing lower, so we may not even get to that area on a rally. If we were to break above it, then you need to pay close attention to the 1.2350 level. Taking that out opens up the possibility of a bullish move for much higher pricing. I don’t necessarily think that happens easily, but we will have to wait and see how this plays out. I’m still more likely to fade rallies, and I don’t have an interest in owning the British pound, or perhaps I should say that I don’t have any interest in shorting the US dollar. Ultimately, this is still a bearish market and I think that once we get through Friday, that will show itself to still be true.

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