GBP to USD Forecast – British Pound Continues to Consolidate

GBP to USD Forecast Video for 11.05.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the day on Wednesday, but then turned around to show signs of hesitation. Alternatively, this is a market that I think will see a lot of back-and-forth noise, and perhaps go looking to the 1.2550 level as support, as it was previous resistance. After breaking out of that previous consolidation area, it does make quite a bit of sense that we would see market memory in that general vicinity. Underneath there, we have the 50-Day EMA which sits right around the 1.2350 level, which was also the bottom of the consolidation region that we just escaped.

On the upside, the market looks as if it is going to continue to look at the 1.2750 level above as a potential target and barrier. If we can break above the barrier, then the market is likely to look into the 1.30 level after that, which of course is a large, round, psychologically significant figure, and an area that has been important multiple times in the past.

Regardless, this is a market that will be noisy, due to the fact that we have an interest rate decision coming out of England in the next few days, and of course we have the Federal Reserve staying tight with its monetary policy, so this causes a lot of volatility. It’s worth noting that the British pound has been one of the better performing currencies against the US dollar this year, and whether or not that continues will remain to be seen, but I think at this point in time the market continues to be very noisy and will continue to be difficult to trade.

Ultimately, this is a market that needs to make a big decision, and we probably will get it over the next couple of days. By the end of the week, we should have a bit more clarity. However, it’s also worth noting that there are a lot of reasons to suspect that there might be enough fear out there to drive money back into the US dollar, but we need to see momentum pickup to the downside before we do that.

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