GBP/USD Forecast – British Pound Sits on 50-Day EMA

GBP/USD Forecast Video for 02.08.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen during the trading session on Tuesday, reaching down toward the 50-Day EMA where a lot of traders will be paying close attention to. Underneath there, we have the 1.2650 level offering a significant amount of support, and of course there is an uptrend line in the general vicinity. However, I think this is a market that is more likely than not going to continue to consolidate in general, due to the fact that we have the Non-Farm Payroll numbers during the trading session on Friday. I think a lot of traders are waiting to see whether or not we are going to see strength in the employment numbers will force the Federal Reserve the stay tighter for longer.

Between now and then, I think markets are going to continue to go back and forth and trying to sort out what we are going to do a longer-term, but the next couple of days are probably just killing time more than anything else. The 1.30 level above is a significant resistance barrier, and if we can break above there, then it’s likely that we could go to the 1.3150 level, and beyond. On the other hand, if we break down below that uptrend line that I mentioned previously, then we test the 200-Day EMA. Anything below that then opens up the possibility of a move down to the 1.1850 level over the longer-term, but I don’t anticipate seeing that happen anytime soon.

Either way, keep in mind that this is a market that has outperformed over the last several months, so a little bit of a pullback does make a certain amount of sense considering that we have seen such a big move higher, but if the jobs number comes out hotter than anticipated it could continue to put pressure on the British pound, or perhaps more to the point, the US dollar more attractive. That being said, I don’t necessarily think this is a situation where we see much between now and Friday, but I am keeping an eye on those important levels.

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