GBP to USD Forecast – British Pound Continues to Drift Lower

GBP to USD Forecast Video for 03.03.23

British Pound vs US Dollar Technical Analysis

The British pound has drifted a bit lower during the trading session on Thursday as we continue to see the US dollar outperform most other assets. The British pound of course has recently got a little bit of a boost from the Windsor Agreement, allowing goods and services to flow across the Northern Ireland border and the EU, but quite frankly that’s a sideshow and nobody really cares. At this point in time, it’s about the bond market and the fact that the US dollar continues to be like a sledgehammer to risk appetite.

As long as yields continue to be very noisy, it’s difficult to imagine a scenario that the British pound suddenly takes off against the US dollar for a sustainable and reliable move. At this point, it’s probably worth noting that we have been gradually grinding lower, pressing up against significant support. That support is something worth paying attention to as the area between current trading and one point 1850 level appears to be crucial. With this, I think we’ve got a situation where if we break down below that 1.1850 level, it’s very likely to see the British pound get crushed.

In that scenario, I would expect the market to trade down to the 1.15 level rather quickly, which is an area that is a large, round, psychologically significant figure in an area that previously has seen a lot of interest. Because of this, I think that you would see a significant amount of momentum in the market, because it would be so obvious to a lot of technical traders. With this in mind, I’ll be watching to see if that trade plays itself out.

On the other hand, if we do rally from here and see a bounce, the 50-Day EMA and the 200-Day EMA indicators above will more likely than not offer quite a bit of resistance, especially as the shooting star had formed from Tuesday, which of course will catch a lot of attention when it comes to traders around the world. Beyond that, the area above there has also been rather noisy and difficult, so I think that it is probably only a matter of time before we would “fade the rally.”

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