GBP to USD Forecast – Sterling Tests 200-Day EMA

GBP to USD Forecast Video for 25.11.22

British Pound vs US Dollar Technical Analysis

The British pound has rallied during trading on Thursday, in what would’ve been relatively light volume for most of the session. The 200-Day EMA has offered a bit of a target and has offered a little bit of resistance. It is at this point that we are starting to ask questions of the overall trend. Quite frankly, a lot of this comes down to whether or not you believe the Federal Reserve is going to slow down its pace of interest rate hikes, and of course whether or not the Bank of England can tighten into a 2 year recession.

At this point, it looks like we have a somewhat binary set up in the sense that if we can break above the 200-Day EMA convincingly, then a lot of traders will start to look at this as a potential uptrend. On the other hand, if we fall back below the 1.20 level, then it’s likely that we are at the very least going to have a correction, if not a continuation of the overall downtrend. Quite frankly, this is where “the rubber meets the road”, meaning that we are going to have to make some serious decisions rather soon.

In this environment, it certainly was helped out by the idea that the Federal Reserve Meeting Minutes showed that some governors were starting to express opinions of slowing down rate hikes. The foreign exchange market is now trying to get in front of the next move, perhaps front running the Federal Reserve and any policy shift that it could end up having. In this environment, anything is possible but I’m going to wait and let the market tell me which direction to trade.

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