GBP/USD Forecast – British Pound Runs Into 200-Day EMA

GBP/USD Forecast Video for 07.11.23

British Pound vs US Dollar Technical Analysis

The British pound has initially rallied a bit during the trading session on Monday, but it looks like the 200-Day EMA is causing a bit of resistance. This makes a certain amount of sense, considering that the indicators are widely followed, and of course the candlestick on Friday was ridiculously bullish. The behavior on Friday was almost as if the US was going to suddenly cut interest rates, so I do think some reality is coming back into the market. That being said, it doesn’t necessarily mean that the market will start falling right away, but at the very least we probably need to pull back in order to work off some of the excess.

That being said, if we were to take out the 1.2450 level, I think at that point you have a real shot at something bigger happening, but it’s also worth noting that we are right at the top of a bearish flag right along with the 200-Day EMA, which is a similar pattern that we see in the EUR/USD currency pair. In other words, this is probably going to be all about the US dollar before it’s said and done, so pay close attention to interest rates in the United States, because that will almost certainly drive where this pair goes.

On a break down below the 50-Day EMA underneath, that would confirm a false attempt at breaking out, and I could see this pair breaking much lower. I don’t necessarily know what to do with this quite yet because we are at a major inflection point, and perhaps that’s the point: when you get a move like this it’s about seeing what the market will do, not what it “should do.” With this, I think you got a potential situation where we could get an explosive move, or we may have to work off some excess froth. You have a few levels to pick from here, and put money to work. Until I get a resolution to this area, I have no interest in trying to second guess what’s going to happen next. Ultimately, it’s all about bond yields.

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