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GBP to USD Forecast – British Pound Continues to Show Strength

By:
Christopher Lewis
Published: Jun 1, 2023, 12:48 GMT+00:00

The British pound initially pulled back a bit during the trading session on Thursday but has found enough support near the 50-Day EMA to show signs of life. Ultimately, this is a market that still has a lot of noise ahead.

British Pound, FX Empire

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GBP to USD Forecast Video for 02.06.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back initially during the trading session on Thursday, to test the 50-Day EMA. However, we have turned around to show signs of life again, and it now looks as if we are going to go looking toward the 1.2550 level. If we get there, it does have a significant amount of resistance built into it, despite the fact that we have broken above there previously. Short-term pullbacks should continue to offer buying opportunities, but I don’t necessarily think that we are breaking out anytime soon.

Underneath, the 1.2350 level should offer a significant amount of support, especially as there is an uptrend line right around the same area, and of course it is the area between the 200-Day EMA underneath, and the 50-Day EMA above. In this area, we will see a lot of noisy behavior, and I do think that eventually buyers would come back into that area. However, if we were to break down below the 200-Day EMA, the market is likely to drop down to the 1.1850 level underneath, which is a significant support level.

In general, this is a market that I think will continue to be very noisy, but you can probably say the same about most currency pairs right now, and with that being the case I think it’s probably only a matter of time before we would see both buyers and sellers get aggressive. At the end of the day, I do think that we have more buying pressure than selling pressure at the moment, as the Bank of England continues to be fighting major inflation. With this, it’s unlikely that we will continue to see the British pound fall significantly, unless of course we see a huge run into the US dollar overall. That being said, the British pound has been one of the better performers against the greenback this last year, so I think it’s probably only a matter of time before the buyers will come back on short-term debts. Whether or not we break out is a completely different question.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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