GBP to USD Forecast – British Pound Gives Up Early Gains

GBP to USD Forecast Video for 08.03.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday but gave back gains to show signs of hesitation. At this point, it looks like we are trying to build up enough pressure to go lower, breaking down below the support. The market has continued to fail every time we get close to the 50-Day EMA, so it is more likely going to continue to be a situation where traders are fading the rally, taking advantage of US dollar strength.

The 50-Day EMA is also backed up by the 200-Day EMA, so therefore I think there are quite a few different players that look to short this market every time it tries to rally. Ultimately, this is a situation where if we can break down below the 1.1850 level underneath, then the market is likely to drop down to the 1.15 level underneath. The 1.15 level is a large, round, psychologically significant figure, and an area where we have seen a lot of noise previously. That previous resistance should now end up being supported.

On the other hand, if we turned around and took out the 200-Day EMA, then it’s likely that we could go to the 1.23 level. After that, then we have the 1.25 level above, that is where we have the double top, which started at the 1.24 level. Ultimately, this is a market that I think continues to see a lot of noisy behavior, but I also believe that this is a market that has a major overhang, and therefore it’s going to be difficult for it to go much higher.

Furthermore, the Federal Reserve is going to remain tighter for longer when it comes to the monetary policy, and therefore it’s likely that we would see the US dollar continue to be strong in general. All things being equal, this is a situation where we continue to see a lot of downward pressure on each rally, and therefore I will be fading each one at the first signs of exhaustion. True, support has held fairly well so far, but it is only a matter of time before it gives way to all of this mounting pressure.

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