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

GBP to USD Forecast Video for 19.12.22

British Pound vs US Dollar Technical Analysis

The British pound has fallen a bit during the last 24 hours, reaching down to the 200-Day EMA. The candlestick from the Thursday session was very negative, so a little bit of follow-through probably would be expected. However, the 200-Day EMA does seem to be attracting a certain amount of attention, so I think at this point we could be looking at this through the prism of a pullback and retest of a major indicator.

If we turn around a break above the top of the candlestick for the session on Friday, then it’s likely that we may make an attempt to get to the top of the previous candlestick. However, if we were down below the bottom of the candlestick, we will be slicing through the 200-Day EMA, and then sending this pair down to the 1.20 level. The 1.20 level is a large, round, psychologically significant figure that a lot of people will be paying attention to, so I would anticipate that it could offer support as well.

If we were to break down below the 1.20 level, then it’s likely that this market has much deeper corrections ahead of it. On the other hand, if we turn around and bounce, we could try to go through the next week or so in consolidation, which would make a certain amount of sense considering that we are heading into the holidays. Because of this, you should probably be cautious with your position size as liquidity causes major issues at times and can make news have outsized effects on the market. Many professional traders simply walk away from the market for the last week or 2 of the year.

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