GBP/USD Forecast – British Pound Attempts to Recover

GBP/USD Forecast Video for 29.09.23

British Pound vs US Dollar Technical Analysis

The British pound initially rallied during the trading session on Thursday, but it’s already starting to show signs of hesitation. Quite frankly, this is a market that has gotten overdone to the downside, and it should not be a surprise to see this market turned back around in the short term. Longer-term, it makes quite a bit of sense that the British pound would continue to go much lower, as the situation in the United Kingdom is somewhat dire, especially considering that the European Union is most certainly going to have a nasty recession this winter, and it should have a bit of a “knock on effect” in the UK.

The Bank of England continues to look very soft, and of course the Federal Reserve continues to be very tight with its monetary policy. Because of this, the market is likely to go down to the 1.20 level, which is a large, round, psychologically significant figure, and breaking down below there opens up a move down to the 1.1850 level. Rallies at this point will continue to see a certain amount of resistance at the 1.2350 level, an area that has been very important in the past multiple times. With that being the case, the market is likely to continue to see a lot of downward pressure in that area, so if we were to break above there it could change a few things, but right now it looks like we are probably getting ready to see the so-called “death cross”, which is when the 50-Day EMA breaks below the 200-Day EMA indicator, signifying a longer term downtrend.

As far as buying is concerned, it’s just a bit difficult to do so in this environment considering just how volatile and uncertain so many things are. Because of this, I think more of a “fade the rally” type of scenario is going to come into play, and I do think that eventually we get down to that crucial 1.1850 level, but it might take some time to get there. After all, we have covered a lot of real estate in a very short amount of time.

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