GBP to USD Forecast – British Pound Pulls Back From Major Figure

GBP to USD Forecast Video for 06.04.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back a bit from the 1.25 level, an area that obviously is a large, round, psychologically significant figure, and an area that a lot of people will be paying quite a bit of attention to. The 1.25 level has been important multiple times in the past, so it does make a certain amount of sense that it would continue to be important going forward.

If we break above the 1.25 level on a nice daily close, then it’s likely that we could go to the 1.2750 level. Ultimately, the market is worth paying attention to because the British pound has been one of the best performers this year. This is a good way to see how the US dollar is doing, because if we suddenly see the British pound selling off quite drastically, you will more likely than not see the US dollar strengthened against almost everything else. Underneath, the 1.24 level should offer a significant amount of support, so breaking down below there would be a very significant sign of weakness.

For what it is worth, the market continues to look a little stretched, so I think that the pullback makes a certain amount of sense for that reason alone. That being said, the market is more likely than not going to see quite a bit of choppy behavior, especially as traders out there are trying to figure out where inflation is going, and of course where the Federal Reserve is going. That being said, if the US dollar does start to sell off quite drastically, the British pound seems to be the first currency that will take off for a bigger move.

The 50-Day EMA has recently broken above the 200-Day EMA, forming the “golden cross.” Because of this, longer-term traders may be looking to buy on dips, and that may very well be the way this plays out. Keep in mind that position sizing will be crucial at this point, but it’s obvious that the British pound is doing everything he can to break out for a bigger move. If and when we do get that bigger move, the 1.2750 level would be the target, followed by the 1.30 level.

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