GBP to USD Forecast – British Pound Trying to Form a Double Top

GBP to USD Forecast Video for 01.02.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen a bit during the trading session as we continue to see the market threaten to form a double top. The double top would be focused on the 1.25 level, and the fact that we now have the Federal Reserve meeting over the next 2 days, I think we’ve got a good possibility of a bit of a pullback from here. This would simply be people taking profit after the US dollar was sold off so drastically.

However, keep in mind that now that we are finally at the event, it will come down to what Jerome Powell has to say, and whether or not the market actually chooses to believe him. After all, he has been rather straightforward about his desire to remain tight for longer, but at the same time, the market has chosen to ignore it. Whether or not that continues to be the case remains to be seen, but quite frankly, I think he’s going to do everything he can to make the market stop the “risk on” behavior.

This should have people looking towards the US dollar, but if he somehow messes this situation up, then we will see the British pound take off yet again. Ultimately, the decision will be made after the Wednesday session, so it’s very likely that most of the trading between now and then will be very choppy and sideways. I would be a bit surprised to see a bigger move, but if anything, I think we probably have more of a downside bias than anything else at the moment based upon what we’ve seen recently.

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