GBP to USD Forecast – Sterling Gives Up a Certain Amount of Strength
GBP to USD Forecast Video for 13.06.23
British Pound vs US Dollar Technical Analysis
The British pound initially tried to rally during the trading session on Monday but gave back gains to show hesitation yet again. Quite frankly, the British pound has been a little overly noisy, as the area above the 1.2550 level seems to be very noisy. Anything above there does attract a lot of pressure, but quite frankly, the market is likely to see a lot of noisy behavior above that level. If we do break down below there, the market then opens up the possibility of a move back down to the 50-Day EMA underneath.
The 50-Day EMA of course is an area that people will be paying close attention to from a technical standpoint, and it could be a short-term target, possibly short-term support. On the other hand, if we turn around and take off to the upside, we could see an attempt to break above the 1.2680 level, an area that has been massive resistance.
All things being equal, this week will be very noisy for this pair and many others as the Federal Reserve has an interest rate meeting on Wednesday that comes into the picture. This of course could cause a lot of volatility for the US dollar, and therefore you could see a lot of noise right around Wednesday. That being said, the Thursday session also features the ECB meeting, and while it won’t directly affect the British pound itself, it will have a knock on effect on the US dollar also. In other words, there will be more volatility that day if we see a sudden move in the greenback.
All things being equal, this looks like a buy on the dip type of situation, but a certain amount of caution will be needed to keep this market easily traded, as the volatility is going to be very extreme in the middle of the week, thereby keeping your position size reasonable allows you to move through the volatility that we are certainly going to see, and therefore gives your trade a bit of room to breathe going forward.
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