GBP to USD Forecast – British Pound Has a Very Quiet Thursday Session

GBP to USD Forecast Video for 09.12.22

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Thursday, as we continue to hang around the 1.22 level. The 200-Day EMA sits underneath and should offer a significant amount of support. If we can break down below that level, then we will almost certainly threaten the 1.20 level. The 1.20 level underneath is an area that is a bit of a gateway to much lower pricing. Breaking down below there then opens up a massive amount of selling pressure.

On the other hand, if we turn around and break above the last couple of days, we could threaten the 1.2350 level. Breaking above that level then opens up and move to the 1.25 level. However, you need to pay close attention to the interest rate market, because quite frankly that’s exactly what we are looking at. Beyond that, the US dollar will be ran towards if there is a lot of fear out there, as it is a safety currency. Ultimately, this is a situation where volatility will probably be the main fear here, as the market is very choppy.

Keep in mind that the Bank of England has already stated that they are expecting a two-year recession in the United Kingdom, so it does make a certain amount of sense that the British pound may struggle to hang on to gain over the longer term. Quite frankly a lot of this is going to come down to interest rate expectations coming out of the Federal Reserve, so next week’s FOMC meeting will be paid close attention to. While the Fed is expected to slow down its rate of hiking, the reality is they are going to stay tight for much longer than people thought.

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