GBP to USD Forecast – British Pound Plunges to the 50-Day EMA

GBP to USD Forecast Video for 16.03.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen rather hard during the trading session on Wednesday, as we continue to see a lot of risk off behavior around the world. Ultimately, this is a market that I think continues to see a lot of concerns, with traders on Wednesday waking up to the news that Credit Suisse will no longer be bailed out by Saudi investors, which of course means that there could be concerns of contagion in the banking system. If that were in fact going to be the case, it’s very likely that we would then see a situation where market participants will run toward safety assets, including the US dollar.

Underneath, the 1.20 level is an area that I would be paying close attention to, as it is a large, round, psychologically significant figure, and an area that a lot of people would be looking at as a potential area of support/resistance and of course “market memory” coming back into the picture. If we break down below there, then the next support level should be near the 1.1850 level, where we had a swing low just recently.

If we were to break down below the 1.1850 level, then it’s likely that the market will start to fall apart, opening up the possibility of a move down to the 1.15 level, an area that has been important multiple times in the past, therefore I think it’s likely that we see quite a bit of noise down there. The psychology of that number alone will probably cause a bit of a noisy move, especially as a lot of options barriers will almost certainly be in that general vicinity.

On the upside, if the market was to take out the highs of the Tuesday session, it’s possible that we could go to the 1.23 level, and then eventually the 1.24 level after that. The 1.24 level is an area that recently formed a double top, as we have seen a lot of selling pressure in the general vicinity that extends to the 1.25 level. That being said, the 1.25 level is a major ceiling in this market that has been important for some time and therefore difficult to break above.

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