GBP to USD Forecast – British Pound Gives Up Early Gain

Christopher Lewis
Published: Jun 6, 2023, 14:08 GMT+00:00

The British pound initially tried to rally during the trading session on Tuesday, but the market turned around to show signs of hesitation.

British Pound, FX Empire

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GBP to USD Forecast Video for 07.06.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday but gave back gain rather quickly. At this point, the market is likely to see the 50-Day EMA is an area of interest, as we are testing it yet again. Underneath, we have the 1.2350 level, an area that had previously been supported. Breaking down below that then opens up the possibility of a move to the 200-Day EMA, and therefore dropping down toward the 1.2250 level.

Ultimately, the market turning back around and showing signs of life could open up the possibility of a move toward the 1.2550 level above, which is an area that has been significant resistance previously. Because of this, I think we’ve got a situation where the market is more likely than not going to continue being noisy, and therefore will be worth paying close attention to when we approach some of these levels mentioned. I think we continue to see a lot of back and forth more than anything else, so keep your position size reasonable and recognize that the market has a lot to chew through in order to get moving for any significant move.

Ultimately, this is a market that I think will be paying close attention to the idea of whether or not the Federal Reserve is going to continue hiking, of course what the deal is going to be when it comes to economic growth or perhaps even the lack of it around the world. If there are a lot of economic concerns, this does drive money into the US dollar historically. That being said, this is a market that I think eventually will have to figure out which direction to focus on, and I think the next couple of weeks could be important to determining the overall directionality of this market given enough time. With that in mind, I suspect we will see a lot of sideways action in the short term, but eventually should give it a bigger break that we can follow. With this, be cautious with your position sizing but once we do break out of this overall range, it’s time to get much bigger.

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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