GBP to USD Forecast – British Pound Pulls Back Slightly

GBP to USD Forecast Video for 02.05.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back just a bit during the trading session against the US dollar on Monday, as we continue to see a lot of noisy and choppy behavior. Ultimately, I think this is a market that is going to continue to pay close attention to this range, but it does look like we have quite a bit of support underneath. After all, we have already turned around some of the losses, and it does seem as if we are somewhat resilient to the upside. With this being the case, I think it’s only a matter of time before we try to break out to the upside. Whether or not we can remains to be seen, but it does appear that as inflation in England is much hotter than most other developed countries, it makes sense that the currency continue to strengthen.

Underneath, the 1.2350 level is the floor, and if we were to break down below there would obviously be a very negative sign. At that point, we would not only break below that level, but also break below the 50-Day EMA, which of course is a widely followed technical indicator by a lot of traders. Below there, then we could have a drop down to the 200-Day EMA, which is closer to the 1.22 level.

That being said, there are a lot of questions about global growth around the world and of course global safety. If that’s the case, we may see a run toward the US dollar on some type of bad news, but as things stand right now it’s probably worth noting that the British pound has been quite a bit more resilient than most other currencies. The noisy behavior continues going forward from everything I can see, so I think between here and that 1.2350 level, you have a lot of noise just waiting to happen. It’s more or less been consolidation with stubborn bullish pressure, and that may continue to be the case in the short term. Longer term, we will eventually break out of this range and make a bigger decision. Once we do, you can follow it.

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