GBP to USD Forecast – British Pound Continues to Grind Higher

GBP to USD Forecast Video for 13.01.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during trading on Thursday, as the Consumer Price Index came out right in line with expectations. Because of this, the market initially started to focus on the fact that perhaps the Federal Reserve will only raise interest rates by 25 basis points next month, but really at the end of the day nobody really knows what will happen due to the fact that the jobs number is still extraordinarily hot in the United States. Because of this, I think you have to be somewhat cognizant of the fact that the market continues to try to find reasons to get bullish of anything but the US dollar, but the facts may not be there.

The 200-Day EMA sits just below and is offering a certain amount of support. However, if we were to give that up and start falling, then the next question will be whether or not we can break down below the 1.20 level. Breaking down below that level then opens up the possibility of a move down to the bottom of the candlestick from last Friday. Anything below there is extraordinarily bearish for the British pound.

On the other hand, if we break higher, then we have to look at the 1.2450 level, which is an area that had caused quite a bit of resistance. If we were to break above there, then we threaten the 1.25 level, an area that I think is a major barrier. With that being said, the market is likely to continue to see a lot of noisy behavior, and now that we are through the CPI number, we have to look for the next catalyst.

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