GBP to USD Forecast – British Pound Gives Up Early Rally on Wednesday

GBP to USD Forecast Video for 02.03.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Wednesday, touching the 50-Day EMA. This is right at the 1.21 level, an area that has been important more than once. At this point, we have touched a short-term barrier that then allowed for more selling. Keep in mind that the British pound has been a bit of an underperformer as of late, and as a result it’s not a huge surprise to see that the British pound has given up gains, as we continue to see the 50-Day EMA and the 200-Day EMA both offer resistance. However, it’s also worth noting that the 1.20 level seems to be the beginning of significant support that drops down to the 1.1950 level.

Looking at this chart, it seems as if the massive selling at the beginning of the month still has shown its effect on the market, as we have been grinding lower in general since then, although it’s been very noisy. If we were to break down below the 1.1850 level, I think that opens up the possibility of a move down to the 1.15 level underneath. On the other hand, if we can break above the 200-Day EMA, I think it’s likely that we are going to go looking to the 1.2250 level, possibly even the 1.24 level after that.

The importance of the 1.24 level of course is that the area formed a double top recently, and it looks as if there is a significant amount of resistance to the 1.25 level above. The 1.25 level above will be very difficult to break through, and therefore I think the British pound may have seen its peak this cycle. It’ll be interesting to see if we do rally towards that area how the market behaves, but if both the Tuesday and the Wednesday candlesticks are to be believed, it’s very unlikely that we will see any sustainable rally in the pound as the US dollar continues to strengthen against almost everything.

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