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GBP to USD Forecast – British Pound Attempts to Recover Into the Weekend

By:
Christopher Lewis
Published: May 26, 2023, 14:13 GMT+00:00

The British pound has rallied a bit during the trading session on Friday, as we have broken above the 1.2350 level and tested the 50-Day EMA.

British Pound, FX Empire

In this article:

GBP to USD Forecast Video for 29.05.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Friday as we continue to see much noisy behavior. That being said, this market has to deal with the 50-Day EMA above, and if we can break above there, the market could try to recapture the 1.2550 level. That being said, we are starting to see a little bit of resistance near the 50-Day EMA as we have seen a little bit of pressure there. The 1.2350 level continues to be an area of interest, and it does make quite a bit of sense that we hang around here as it was previous support; therefore, a certain amount of “market memory” comes into play here.

That area should continue to be crucial, and it’s probably worth noting that the 200-Day EMA sits just below; therefore, I think it has a certain amount of support just waiting to happen. The 200-Day EMA is an indicator that a lot of people pay close attention to because it is a trend-defining indicator that a lot of people pay less attention to.

If we were to break down below the 200-Day EMA, then the market could fall to the 1.1850 level, an area that will be supported, and therefore it could be a target if we start to sell off quite drastically. Keep in mind that this pair is highly influenced by risk appetite as well, and of course, the US dollar is a major safety currency that a lot of people will pay close attention to. Furthermore, the Federal Reserve continues to be very tight with its monetary policy, which has a major influence on the greenback.

If we were to turn around and break above the 50-Day EMA, it would probably come on the back of a lot of US dollar selling worldwide. That being said, the market is going to continue to be very noisy, which is simply going to be a continuation of what we have seen for some time. Make sure you pay close attention to your position size and take money-management seriously, because it’s the only thing you can do in an environment that is so noisy.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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