GBP/USD Forecast – British Pound Attempts to Stabilize
GBP/USD Forecast Video for 04.10.23
British Pound vs US Dollar Technical Analysis
The British pound has initially drifted a little bit lower during the trading session on Tuesday, but it looks like we are a little overstretched. A short-term bounce from here could lead the market into consolidating around the 1.21 level, maybe even as high as the 1.22 level. Ultimately, this is a market that continues to be very bearish, and I don’t think that will change anytime soon. In fact, we are starting to see the 50-Day EMA cross below the 200-Day EMA, kicking off the so-called “death cross.”
This of course is a very negative turn of events, and a lot of longer-term traders will look at this as a selling signal. In other words, a lot of algorithmic traders will jump in and start shorting, but I’m not willing to chase the market all the way down here. A short-term rally is probably reasonable at this point, but I will be looking to step on it like a bug.
Alternatively, if we were to break down below the bottom of the candlestick, then it opens up the move to the 1.20 level underneath, and then possibly the 1.1850 level underneath. The 1.1850 level underneath is an area that I think will attract a lot of attention, and probably a massive amount of profit taking. Because of this, I will be looking at this as a market that I’m looking to pick up “cheap US dollars”, and every time we rally at this point in time, I’m looking for signs of hesitation so I can start shorting again.
The 1.2350 level above is a significant resistance barrier, and I believe the market is going to end up being a ceiling in the market. If we were to break the above that, then I would have to make an argument that things could be changing, and I would have to look at the fundamentals. Ultimately, I think we are looking for opportunities, and we may get one here over the next several days. Keep in mind that the jobs number comes out on Friday as well.
For a look at all of today’s economic events, check out our economic calendar.