GBP to USD Forecast – British Pound Continues to Stretch Higher

GBP to USD Forecast Video for 09.05.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied rather significantly again during the day on Monday, as we continue to see the US dollar gets sold off. The British pound, of course, has been helped by the higher inflation in the United Kingdom and the fact that the Bank of England will have to stay tight. At this point, many traders believe that the Federal Reserve will have to cut rates sooner rather than later. This is especially true as we continue to see a lot of banking issues in the United States from the regional banks themselves.

The 50-Day EMA sits at the 1.2350 level and is rising. That’s an area where we have seen a lot of support in the past, so I think at this point, we will likely continue to see that as a “floor in the market” that traders will pay close attention to. Ultimately, this is a market that is now firmly in the “buy on the dips” camp, and it looks as if we are going to try to continue to extend even further. The 1.2550 level was previously resistant, so there should be enough support for any pullback. As far as going higher, I believe the market will eventually try to get to the 1.2750 level, an area that previously had been important.

Breaking above that then would allow the British pound to reach the 1.30 level, an area that, of course, is a large, round, psychologically significant figure, and an area that previously had seen in importance as well, so I think ultimately that makes for a decent target. Regardless, it’s very important to keep in mind that we are in a very volatile market at the moment, and of course, there are a lot of questions about global growth in economic health. If we do start to see things unravel, that could be a reason for the US dollar to be sought out by traders worldwide. Ultimately, it’s a very bullish market, but we also have a lot of things to worry about, so please keep in mind that it’s not necessarily a market that will shoot straight up in the air, and the occasional pullback should be expected along the way.

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