GBP to USD Weekly Forecast – British Pound Pulls Back for the Week

GBP to USD Forecast Video for 15.05.23

British Pound vs US Dollar Weekly Technical Analysis

The British pound initially tried to rally during the trading week but gave back quite a bit of the gain to show signs of negativity. The market has been in a strong uptrend for several weeks in a row, and therefore printing a negative candlestick is a reasonable thing to do. After all, markets cannot go in one direction forever. That being said, a lot of traders will look at this as an opportunity to find a bit of value. A lot of traders will be out there looking for a “buy on the dips” situation, and they may get one if they are willing to wait for a candlestick or 2 to form.

The 1.2350 level is an area where I would expect to see support based upon the fact that it was previous resistance, so with that in mind I’m looking for supportive candlesticks underneath to take advantage of. Even if we were to break down below there, the 50-Week EMA will certainly offer a bit of support as well. Alternatively, I think it’s only a matter of time before the buyers return, and I don’t necessarily think this is the end of the overall uptrend, at least for now.

That being said, the market will continue to be very noisy, and therefore I think you need to pay close attention to monetary policy because both of these banks are going to be very tight. The British pound has been one of the better performers over the last year or 2, so, therefore, it’s difficult to fight this trend, but if we do see some type of change in tone from the Bank of England, that might be a reason to send this market lower, or perhaps if we get some type of negative economic news that sends people running toward safety in the form of the US dollar. However, this one negative candlestick is not enough to change the overall attitude at this point.

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