GBP to USD Forecast – British Pound Bounces to Kickoff the Week

GBP to USD Forecast Video for 16.05.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Monday, as the pound is going to continue its overall upward trajectory, or at the very least, trying to go sideways from here. In this environment, I think it’s probably more likely than not going to be a situation where the market has to work off some of the excess froth, due to the fact that the market got here a little too quickly. The 50-Day EMA underneath sits just above the 1.2350 level, an area where it’s been very important. As long as we stay above there, then you have to look at the possibility of buying dips. At the very least, we may have to consolidate in this area to try to sort out where we go next.

That being said, if the market were to break down below the 1.2350 level, then it opens up the possibility of a move down to the 200-Day EMA. The 200-Day EMA is of course going to be a major support level and an area where a lot of people will be paying close attention to as traders tend to use it as a trend-defining indicator.

If the market were to break above the recent highs and the 1.27 level, then it’s likely that the market will go looking toward the 1.30 level above, which is the next large, round, psychologically significant figure, and an area where we have seen a lot of noise in the past. As things stand right now, it’s very likely that we continue this choppy and erratic behavior, but in a relatively tight range. That’s probably going to be true with most of the Forex market, and I don’t necessarily think that the British pound/US dollar pair is any different than anything else.

Ultimately, there are a lot of concerns as to whether or not the Federal Reserve will continue to be very tight, and of course, whether or not the inflation situation in both the United Kingdom and the United States will continue to be overheated. If that’s the case, then it’s going to be difficult to get clean and clear signals all the time.

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