GBP to USD Forecast – British Pound Gives Up Early Gains on Friday

GBP to USD Forecast Video for 08.05.23

British Pound vs US Dollar Technical Analysis

The British pound has initially rallied a bit on Friday, as we continue to see a lot of strength coming out of Sterling. However, the jobs number came out hotter than anticipated, and we have seen the US dollar pick up some strength. Because of this, is very likely that the British pound will continue to see buyers on dips, but I also recognize that the area that we are in currently has been a significant barrier to overcome.

In other words, this is a “buy on the dip” market, but with a major ceiling sitting just above. With that being the case, it’s very difficult to get overly excited about getting along quite yet, just as it’ll be interesting to see about shorting this pair, because there is so much noise underneath. In fact, we had quite a bit of noise all the way down to at least the 1.2350 level that we need to pay attention to. After all, the market has seen previous consolidation, and now has the 50-Day EMA in the same neighborhood.

Looking at the chart, if we do break above the highs of the Friday session that would be a very bullish sign, perhaps opening up the possibility of a move to the 1.2750 level, which is another area where we have seen noise in the past. After that, then we have to start thinking about the idea of the 1.30 level. Ultimately, one thing that could come into the picture is that we see so much in the way of economic concern out there that we could start to see money run back toward the US dollar, but as the inflation situation in the United Kingdom continues to be quite sticky, the British pound has been one of the better performing currencies around the world. I suspect that continues for the time being, but at a very stagnant and grinding type of momentum. I’m not looking for big moves in this pair, but I do think that a short-term pullback almost certainly attract buyers.

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