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

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

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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.

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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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