GBP to USD Forecast – British Pound Gives Up Early Gain

GBP to USD Forecast Video for 17.01.23

British Pound vs US Dollar Technical Analysis

The British pound initially rallied during trading on Monday, but has struggled to hang onto gain. This should not be a huge surprise, because there is a massive negative bar that we are trying to dig into from a couple of weeks ago where we had seen a lot of selling pressure. With that being the case, it does set up that we might have a ceiling near the 1.2450 level, so the closer we get to that area, the more likely we are to see a lot of noisy behavior. Because of this, I think you are going to see a short-term “fade the rally” type of behavior, but you have to be aware of the fact that the US dollar itself has been on the back foot for a while now. With this being the case, I think you got a scenario where you are setting up for more volatility.

The 200-Day EMA sits below at the 1.21 level, and I think it is an area worth paying close attention to. After all, we have a situation where the 50-Day EMA is racing toward it, getting ready to form the so-called “golden cross.” While I do not subscribe to this or the so-called “death cross”, I do know that a lot of people out there will be paying attention to it. Because of this, I think we have a situation where the volatility is going to be the main feature of this market, but that’s easily said about most of the Forex world in general right now. Either way, keep your position size light, and recognize that the end of the session on Monday would have been a holiday in the United States.

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