GBP to USD Forecast – British Pound Running Into Wall of Resistance

Christopher Lewis
Published: Mar 29, 2023, 13:58 UTC

The British pound initially tried to rally during the trading session on Wednesday, but you can see that the market has run into a little bit of resistance.

British Pound, FX Empire

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GBP to USD Forecast Video for 30.03.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit to kick off the trading session on Wednesday, but we are approaching the crucial 1.24 level, an area that formed a significant double top. That area, extending to the 1.25 level, should be very difficult to get above. The market should continue to see plenty of selling pressure in this general vicinity, so I would anticipate that we pull back into the previous consolidation area. The market has been in a range for a while, and I just don’t see how that would change anytime soon. After all, we still have all of the same problems that we have had for a while, namely a bit of confusion when it comes to the overall directional bias of the market.

The global economy seems to be slowing down, so that does not bode well for currencies outside of the United States. As we head into a recession, it’s very likely that the US dollar will be one of the main beneficiaries. The 50-Day EMA sits just below the 200-Day EMA and is threatening to break to the upside. However, these moving averages are very flat so I would not read too much into that, other than the market is more likely than not to continue a consolidation phase. Those moving averages are near the 1.21 level, which I think would be a minor support level.

Underneath, the 1.20 level is a large, round, psychologically significant figure, but we also have to look at the 1.1850 level, which has been significant support multiple times. That’s the bottom of the overall range, so breaking down through that would obviously be very negative. In that environment, I would anticipate the British pound dropping all the way down to the 1.15 level. On the other hand, if we were to break above the 1.25 level, then it could kick off a bit of a “buy-and-hold” type of market, with the US dollar losing strength over time. In that environment, I would like to see the US dollar losing value against many other currencies at the same time, if I were to follow that move.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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