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GBP to USD Forecast – British Pound Gives Up Early Move Higher

By:
Christopher Lewis
Updated: Mar 23, 2023, 13:24 GMT+00:00

The British pound has rallied a bit during the trading session on Thursday but gave back some of the gains as we are approaching the previous double top.

Britisih Pound, FX Empire

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GBP to USD Forecast Video for 24.03.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit against the US dollar early during the trading session on Thursday, breaking above the 1.23 level. 1.23 level is an area that begins the cluster that formed the double top at the 1.24 level. In other words, there will probably be a significant amount of resistance just above, so giving up some of the gains does make a certain amount of sense. After all, the Federal Reserve continues to raise rates, and has reiterated during the session on Wednesday and that they are going to stay tight going forward, even if that means that they have to continue tightening interest rates.

Looking at this chart, it certainly looks as if we are a little overextended anyway, and the fact that we gave back some of the gains does suggest that perhaps we are ready to start pulling back towards the US dollar. On the other hand, if we were to somehow break above the double top at the 1.24 level, that means that the market would then challenge the psychologically and structurally important 1.25 level. That being said, the market would then start to see the British pound take off to the upside, perhaps kicking off a huge move higher.

If we break down from here, the 1.20 level underneath would be a large victory for the US dollar, as it is an area that’s been a bit of a magnet for price over the last several months, so it does suggest that perhaps we are going to see a bit of a fight in that area if we do get down to it. Anything under there would then threaten a move down to the 1.1850 level, an area that previously had been major support. That’s essentially the bottom of the overall consolidation area, and if we were to break down below there it opens up a bit of a trapdoor for falling prices. Ultimately, this is a market that looks a little heavy, so I’ll be looking for opportunities to short if there’s any opportunity to do so over the next several days.

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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