GBP to USD Forecast – British Pound Continues to Trade in The Same Range

GBP to USD Forecast Video for 04.05.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Wednesday, as we continue to trade in the same 200 point range. Ultimately, this is a market that I think eventually will have to make a bigger decision and the fact that the Federal Reserve meets late on Wednesday could be one of the catalyst. However, we also have to keep in mind that the ECB meets on Thursday, which could have an influence on the US dollar itself, then of course we have the employment figures on Friday. That being said, I suspect that by the end of the day if we are still in this range on Wednesday, it’s very likely that we will stay in this range between now and the end of the week.

Keep in mind that the Bank of England has to deal with much more inflation than most other developed economies, so it does keep a little bit of a bid underneath the British pound. Because of this, I think you got a situation where the market will continue to be quite noisy, but I don’t know that there is enough out there to push the market to the upside for any significant amount of time. With that in mind, I think we continue to see more volatility than anything else and therefore I’d be cautious about getting overly aggressive in one direction or another. The 50-Day EMA sits underneath at that 1.2350 level, so I think it does offer a significant amount of support, but if we were to break down below there I think we could see a huge move lower. In that scenario, I would not be surprised at all to see this market drop down to the 200-Day EMA.

On the upside, if we were to break out, then it does open up the possibility of a move to the 1.2750 level, and after that could open up and move to 1.30. This will almost certainly have to do with the Federal Reserve if it happens, so keep an eye on the press conference.

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