GBP to USD Forecast – British Pound Continues to Go Back and Forth

GBP to USD Forecast Video for 01.05.23

British Pound vs US Dollar Technical Analysis

The British pound has been continuing its choppy and sideways behavior during the trading session on Friday, as we continue to see a lot of back-and-forth behavior in general. The area between the 1.24 level and the 1.25 level has been very difficult to get above recently, and therefore it’s not a huge surprise to see that Friday is showing more of the same behavior. At this point, we are trying to figure out whether or not we can continue to go higher over the longer term.

Quite frankly, there are a lot of different things going on at the same time that could come into the picture, and therefore I think you will continue to see a lot of confusion. At this point, a lot of traders are hoping that the Federal Reserve will come in and bail everybody out, and that’s part of what you are seated in the currency markets. The fact that the US dollar continues to see a little bit of negativity, it does suggest that traders are still hoping for that “cheap money”, which is what’s been the monetary policy for what seems like a lifetime. This latest round of tightening is already starting to slow the economy down, but traders may be a bit surprised by the Federal Reserve and its wherewithal.

The 50-Day EMA sits underneath near the 1.23 level and is starting to rise. Ultimately, the market has to determine whether or not the US dollar is finally going to give up its grip on the market, and allow the British pound to go much higher, perhaps reaching the 1.2650 level, followed by the 1.2750 level. On the other hand, if we turn around and break down below that 50-Day EMA, it’s very likely that we go down to the 200-Day EMA, which is near the 1.22 level, and of course rising. Anything below that could change the entire trend, but we are quite some distance from that right now, and therefore it’s not worth worrying about that for the time being.

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