GBP to USD Weekly Forecast – British Pound Plunges During Tough Week

Christopher Lewis
Published: Feb 3, 2023, 15:41 UTC

The British pound has gotten hammered during the trading week, as we are now below the 50-Week EMA. Ultimately, this is a market that looks as if it’s going to be threatened significant support underneath.

British Pound, FX Empire

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GBP to USD Forecast Video for 06.02.23

British Pound vs US Dollar Weekly Technical Analysis

The British pound has broken down rather significantly during the course of the trading week, slicing through the 50-Week EMA. If you flip over to the daily chart, you can see that we are in the midst of forming a major double top, and therefore it will be interesting to see how this plays out over the long run. Granted, a lot of what we are seeing is a reaction to not only the Bank of England, but the jobs number on Friday. The jobs number on Friday came out at 518,000 jobs added, a huge beach over the anticipated 188,000 level.

The size of the candlestick does tell me there is probably going to be some follow-through, but you can clearly see that there is a massive hammer sitting right around the 1.20 level, so if we break down below there, that would be an extraordinarily negative turn of events and I think at that point we plunge toward the 1.15 level. I do think that the market just had a massive bear market rally, and I do believe that the British pound will continue to fight itself in a downtrend, although that doesn’t necessarily mean that we sliced through that support level easily.

All of that being said, if we were to break above the 1.25 level, then it’s likely that we could see a bigger move, as it would be a major resistance break, and could send this market much higher, but that doesn’t necessarily look like it’s going to happen anytime soon, so I believe that rallies get sold into.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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