GBP to USD Forecast – British Pound Attempts a Recovery on Thursday

GBP to USD Forecast Video for 10.03.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Thursday, bouncing from the lows that were hit earlier this week. However, it does not look like there is a whole lot of follow-through waiting to happen, and therefore I suspect it is going to be only a matter of time before we test the lows again. This makes quite a bit of sense considering that the British economy is sluggish at best, even though it also has inflation. Furthermore, Jerome Powell has reiterated his desire to keep interest rates tight for longer, and perhaps even speed up the process of hiking rates. This has put a boost in the US dollar again, and therefore it’s difficult to imagine which currency is going to suddenly do better.

If we break down below the lows of the Wednesday session, it’s very likely that we will work our way down to the 1.15 level, which in and of itself is a major area. Yes, there is a little bit of noise just below the lows of Wednesday, but for the most part it looks like the market has already made up its mind, at this point and only need some type of reason to do so. Furthermore, when you look at the chart you can see we have formed a massive “M pattern”, which is just an extended double top.

Rallies at this point in time will more likely than not get sold into, and therefore signs of exhaustion on short-term charts might be used by some traders to enter the market as well. I don’t really have an interest in trying to buy this pair right now, because of the move that we saw on Tuesday, which was a simple continuation of massive selloff that we had seen previously. That original selloff was after forming a significant double top at 1.24, which now looks as if it is the top of the entire recovery rally.

All things being equal, I will be fading short-term charts that show signs of exhaustion, although I don’t necessarily expect to see the British pound meltdown against the greenback. This won’t be like last year where the US dollar was like a freight train, it’ll be more alas just a general move toward it.

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