GBP to USD Forecast – British Pound Bounces

Christopher Lewis
Published: Feb 8, 2023, 14:47 GMT+00:00

The British pound has bounced a bit during the trading session on Wednesday, as we continue to look at the 1.20 level as a major support level. It’s a large, round, psychologically significant figures so this should not be a big surprise.

British Pound, FX Empire

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GBP to USD Forecast Video for 09.02.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Wednesday, using the 1.20 level as support. This is a market that will continue to see a lot of noisy behavior, and of course the 1.20 level is an area that will continue to attract a lot of attention. By bouncing the way we have, we do open up the possibility that the market is willing to stay within the recent consolidation area, but what I have noticed is that all of the big candlesticks are negative. Typically, this means that eventually you will get a breakdown.

With that in mind, I’m looking for signs of exhaustion after rallies that I can sell. The 1.1850 level is an area where I would expect to see support as well, but if we were to break down through there, it opens up and move all the way down to roughly 1.1550 or so. On the other hand, if we do break above the moving averages, we could make a run toward the 1.23 level, but I think anything above there gets to be a bit overdone, and I believe that we have just formed a major double top in this pair.

It could be proven wrong of course, and if we break above the 1.25 level I would consider this a market that has broken out for a much bigger move and could possibly go looking toward the 1.30 level over the long term, but that would almost certainly have to be accompanied by a major US dollar selloff.

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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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