GBP/USD Forecast – British Pound Attempts to Recover

GBP/USD Forecast Video for 17.10.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied a bit during the trading session on Monday, as it looks like we are trying to sort things out. Alternatively, this is a market that looks as if it is in the midst of building a bearish flag, so I still like the idea of shorting this market. That doesn’t necessarily mean that I’m willing to do it right here, just that I’m looking for signs of exhaustion to get involved with. If we break down below the 1.21 level, then it opens up a move down to the 1.20 level, which of course is the large, round, psychologically significant figure that we had bounced from previously. If and when we break down below there, then it’s likely that the British pound will eventually reach down to the 1.1850 level.

The 1.1850 level is an area that had previously offered quite a bit of support, so therefore it makes quite a bit of sense that we would see that as not only a target, but also a potential floor in the market. Whether or not we break down below there remains to be seen, but clearly there are enough issues in the world to make the US dollar somewhat attractive as a safety asset. The British pound sees the 1.2350 level as significant resistance, as we had seen last week. I look at this market as one that continues to be more of a “sell the rally” situation, and with the 50-Day EMA reaching toward that area, it offers even more downward pressure.

Expect a lot of choppy and noisy behavior, but I do think that given enough time we are going lower. It’s not until we break above both the 50-Day EMA and the 200-Day EMA indicator that I would consider it a market that I would be a buyer in. After all, the US dollar offers more interest, and of course safety. That probably continues to be the play for some time, especially while geopolitical tensions have gotten so bad, and of course the European Union may be slipping into a recession, almost certainly taking the UK down with it.

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