GBP/USD Weekly Forecast – British Pound Pulls Back for the Week

GBP to USD Forecast Video for 24.07.23

British Pound vs US Dollar Weekly Technical Analysis

The British pound has pulled back quite a bit during the trading week, to wipe out the gains from the previous week. We are sitting on top of the 200-Week EMA, which of course a lot of people will be paying close attention to. The 1.30 level offered far too much in the way of resistance to continue going higher, and I think it makes a lot of sense that we would see this market look for buyers in this area. All things being equal, I think we are trying to build up enough momentum to finally break to the upside, but if we were to break down below the 1.2650 level, then it wipes out a lot of the upward momentum, at least from the last couple of months.

In general, I think this is a market that probably goes back and forth overall, and it is going to be highly dependent on what traders think about the Federal Reserve. At this point, they believe that the market is likely to believe that the Fed is only going to raise interest rates one time, maybe 2 at most. However, what we don’t have a gauge on is how long they are going to keep those rates raised. There has been nothing coming out of the Federal Reserve that has remotely suggested that they are going to cool off anytime soon.

On the other side of the Atlantic, you have the Bank of England and all of its headaches coming out of inflation. This is why the British pound overall has been a better performer against the greenback than most of its contemporaries. I think that will continue to be the case, but we don’t have any technical reason to get long at this point.

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