GBP to USD Forecast – British Pound Rallies on Wednesday
GBP to USD Forecast Video for 08.06.23
British Pound vs US Dollar Technical Analysis
The British pound rallied a bit during the trading session on Wednesday as we continued to see a lot of “buy on the dip” mentality. The 50-Day EMA has acted as support, as one would expect. We have been trading between the 1.2350 level underneath and the 1.2550 level over the last couple of weeks, so it makes sense that we could see the market stay in this area. However, breaking out of this range could give us a bit of a “heads up” as to where we are going.
The 1.2550 level being broken to the upside opens up the possibility of a move toward the 1.2650 level, which of course was the recent high. If we were to break above that, the market could obviously go much higher. In that scenario, you have more of a “buy-and-hold” situation, and therefore I think we will go much higher at that point, probably attacking the 1.30 level. On the other hand, if we were to turn around and break down below the bottom of the range of the 1.2350 level, then we will probably try to get down to the 200-Day EMA.
Anything below the 200-Day EMA could send this market plunging, perhaps all the way down to the 1.1850 level. In that scenario, we probably have a situation where market will continue to see a lot of negativity, and probably US dollar strength in general as it would probably be more of a “risk off market” overall. In that environment, I think it would not only be the British pound that fell, but probably several other currencies against the greenback as well.
Keep in mind that the Federal Reserve has an interest rate meeting next week, and that of course will have a direct effect on what happens here. If the Federal Reserve gets aggressive, that will almost certainly put more pressure on this pair to the downside, but then again you can say the same thing about the exact opposite action as well, as it will put pressure to the upside if the Fed does in fact sound a little bit more dovish than they have recently.
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