GBP to USD Forecast – British Pound Continues to Struggle With the Same Resistance

GBP to USD Forecast Video for 31.01.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Monday, as we try to figure out what to do with the 1.25 level. After all, it’s a large, round, psychologically significant figure, but more importantly, we also have the Federal Reserve meeting on Wednesday which everybody will be paying close attention to. With that in mind, most of the argument will center around the idea of whether or not the Federal Reserve sounds hawkish or dovish. We already know that they are going to have tight monetary policy, but we already have those out there looking to get some type of head start on the Federal Reserve becoming a bit looser.

I don’t necessarily know that happens, but the very first chance that the markets get to sniff out some type of dovish behavior, they will be all over it. That being said, if Jerome Powell sounds extraordinarily hawkish again, the US dollar should have a good move, and that will more likely than not solidify the 1.25 level in the British pound.

It’s worth noting that the 50-Day EMA is underneath and is trying to break above the 200-Day EMA, forming the so-called “golden cross.” That typically means that longer-term traders are more tempted to buy and hold, but I think we are at that inflection point to make that decision anyway. If we were to fall from here, it’s very likely that those moving averages would become dynamic support. On the other hand, if we can take out the 1.26 level, we will have cleared all of the noise and could continue to go much, much higher over the next several months.

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