GBP to USD Forecast – British Pound Continues to Consolidate in Tight Range

GBP to USD Forecast Video for 01.03.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Tuesday to reach toward the 50-Day EMA. The 50-Day EMA is an indicator that a lot of people pay close attention to, and therefore I would anticipate that there should be some type of reaction. Furthermore, the 200-Day EMA is just above the 50-Day EMA, so it does make a certain amount of sense that we would have a lot of resistance in that region. Furthermore, we’ve seen a lot of structural resistance over the last couple weeks, so I think at this point we simply consolidate in this area and try to figure out where we are going to go longer-term.

The British pound has gotten a little bit of a boost as of late due to the fact that a few members of the Bank of England have suggested that they are going to have to stay with tight monetary policy for longer than anticipated. Ultimately, this is a market that I think will continue to be very noisy, but at the end of the day, it seems to have a somewhat well-defined range.

That being said, the 1.22 level does seem to be a lot to get beyond, and therefore we would need some type of Herculean effort and fundamental reason to make that happen. Alternatively, if we break above there then the double top could be threatened. The double top currently sits at the 1.24 handle, and therefore one would have to look at that through the prism of either a target or barrier if we break out.

There does seem to be a lot of noise above there extending to the 1.25 level, which of course is a large, round, psychologically significant figure. Further causing a bit of noise is the fact that the market had pulled back from what is the 50% Fibonacci were level of the big move lower last year. Ultimately, this is a situation where we would see a lot of volatility, but at this junction the market is wide enough for some type of bigger move. There is a lot of uncertainty out there, and therefore caution is the better part of valor.

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