GBP to USD Forecast – British Pound Bounces From 200-Day EMA

Christopher Lewis
Published: Dec 7, 2022, 15:04 UTC

The British pound has bounced a bit during the trading session on Wednesday, as the 200-Day EMA has attracted a certain amount of buying pressure.

British Pound FX Empire

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GBP to USD Forecast Video for 08.12.22

British Pound vs US Dollar Technical Analysis

The British pound has bounced a bit during the trading session on Wednesday after touching the 200-Day EMA. Currently, the market looks as if it’s fixating on the 1.22 level as a potential barrier, and if we can get above the 1.2350 level, it’s possible that the trend will continue to go much higher, perhaps sending the British pound to the 1.25 level, maybe even higher than that.

The fact of the matter is that this has been one hell of a recovery, but recently we have seen a lot of selling pressure just above, and that does suggest that we are going to continue to see plenty of pressure from above. Nonetheless, this is a market that I think will continue to be very noisy, therefore you need to be cautious with the position sizing. We have gotten way ahead of ourselves, but that doesn’t necessarily mean that we are suddenly going to find religion by slowing down.

If we were to turn around and breakout below the 200-Day EMA, then it’s possible that we could see an even steeper pullback, and we are most certainly in an area where I would expect to see a lot of noise and potential selling pressure. If the Federal Reserve gets the message through to the market next week that they are going to stay tight monetarily, then we may see US dollar strength return. At this point, we are getting close to the end of the year, so it’ll be interesting to see how liquidity affects pricing as well. Nonetheless, this is a market that seems to be fighting something rather big just above.

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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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