GBP/USD Forecast – British Pound Testing Support

GBP/USD Forecast Video for 04.08.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen a bit against the US dollar initially during trading on Thursday, but it looks like the 1.2650 level is an area that has offered quite a bit of support, and it looks like we are turning around. The 50-Day EMA sits just above the current candlestick, and of course we have the uptrend line sitting just underneath. All things being equal, the market continues to see a lot of noise in general, and therefore I think you got a situation where there is a certain amount of value hunting for “cheap British pounds” going on. That being said, we have the Non-Farm Payroll numbers coming out on Friday, and that has a lot to do with what happens next with the US dollar.

If we do turn around a break above the 50-Day EMA, then it’s possible that we could go looking to be 1.30 level above. The 1.30 level is of course a large, round, psychologically significant figure, and an area that would attract a lot of attention, and more likely than not will have a lot of options barriers. That being said, if we were to break down below the uptrend line, then we might threaten the 200-Day EMA, but I doubt that is going to be that easy to happen. After all, the market will continue to see a lot of questions, as there are a lot of uncertainties when it comes to the Federal Reserve and what it’s going to do next.

If the jobs number comes out hotter than anticipated, that could continue to push the British pound lower, but we will have to wait and see how that number comes out, and of course whether or not the market reacts to it in any particular way. I still think we are more or less in a consolidation phase, looking for some type of support. Ultimately, this is a situation where volatility opportunities remain high, but we are still very much in the way of an uptrend and that should not be forgotten. Keep your position size reasonable, as we will certainly see a lot of noise in the morning.

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