GBP to USD Forecast – The British Pound Pulls Back

GBP to USD Forecast Video for 10.05.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday but then gave back gains as it looks like the US dollar is trying to claw back some of its territory. Ultimately, the market has been overdone to the upside, so it does make a certain amount of sense that the pair pulls back, perhaps trying to reach the 1.2550 level, an area that previously had been resistance. “Market memory” could come into the picture here, offering a little bit of buying pressure. On the other hand, if we break down below the 1.2550 level, the market could drop all the way to the 50-Day EMA, which sits down to the 1.2350 level.

Ultimately, this is a market that I do think eventually gets buyers back into the British pound, but at this point it just simply seems as if we have gone too far and too short of amount of time. That being said, if the market were to turn around and break down below the 1.2350 level, then it’s likely that the market could start to fall apart. That being said, the market is likely to continue to see a lot of volatility regardless, so with that being said, I think this is a market that remains “buy on the dip”, at least until we break down below that crucial level of 1.2350.

On the upside, if the market were to break above the highs from the Monday session, it would open up the possibility of a move to the 1.2750 level. The 1.2750 level is an area that has been important as resistance in the past, so it’s very possible that we could see a break above here open up the possibility of a move to the 1.30 level. Keep in mind that the Federal Reserve is likely to pause on rate hikes, but they are still going to remain very tight with monetary policy, so although the British pound may continue to benefit from expected behavior out of the Bank of England, it may not do as well as it had been going against the US dollar in the past. Volatility is expected to continue to be a major issue.

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