GBP to USD Forecast – Pound Continues to Reach for the Upside

GBP to USD Forecast Video for 17.05.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Tuesday, as the 50-Day EMA underneath continues to offer a little bit of support, but at the end of the day, there’s probably even more support at the 1.2350 level. The 1.2550 level above offers a little bit of resistance, and the market seems as if it is happy to chop back and forth in this area. With that being the case, the market is likely to continue seeing a lot of volatility and uncertainty, and that does make a certain amount of sense considering everything that’s going on with the debt ceiling situation in the United States and of course, the overall economic uncertainty around the world.

Looking at this chart, it’s obvious that we have been very noisy for a while, and I don’t think that changes anytime soon. Ultimately, this is a situation where remains “buy on the dips”, but if we were to break down below the 1.2350 level, it could change quite a few things. In that scenario, the 200-Day EMA would almost certainly be tested, sitting near the 1.2250 level, and then after that we could drop as far as the 1.1850 level. Either way, this is going to be an interesting market to follow, because there is a huge inflation battle in the United Kingdom, while at the same time there are questions out there about whether or not the Federal Reserve can stay tight forever. I doubt they can, but at this point in time it’s very likely that they will stay tight for much longer than the market give them credit for.

Ultimately, if we do eventually break out to the upside, clearing the 1.27 level would be the first major hurdle to get beyond. If we do, then it opens up the possibility of the British pound trading at 1.30 eventually, which of course is a large, round, psychologically significant number that would attract a lot of headlines. If that happens, it’s probably going to be in an environment where the US dollar sells off in general.

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