GBP/USD Forecast – British Pound Bounces After Initial Selloff

GBP/USD Forecast Video for 09.11.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back just a bit during the trading session on Wednesday, as we continue to see a lot of noisy behavior. That being said, I think this is a situation where traders will have to pay attention to the idea of where risk appetite is going, because obviously the US dollar is highly sensitive to risk appetite.

Ultimately, I think this is a scenario where you need to look at the market through the prism of not only risk appetite, but interest-rate differential. The US continues to see higher rates, although the UK has fairly strong rates as well. At this point, you also have to keep in mind that the market is probably going to continue to pay close attention to the idea of the European Union dragging the United Kingdom down with it, as the EU is already in a recession.

With this, I think you will get a situation where the market will continue to be very noisy but I still believe that in this scenario you are looking to take advantage of “cheap US dollars”, so therefore I am fading the first signs of exhaustion on this pair on short-term charts. That’s been the plan for a while, and we are very much stuck in the bearish flag that we had been in, so I think that continues to be the situation in this pair.

If we were to break down below the bottom of the bearish flag, it’s likely that the market will then go down to the 1.20 level, possibly even lower than that. On the other hand, if we turn around and break above the top of the shooting star for the Monday session, that would be an extraordinarily bullish sign, opening up the possibility of a move to the 1.25 level, possibly even the 1.2750 level. Expect a lot of noisy trading in this environment, but I still am negative on this pair and have no interest in going long anytime soon. That of course can change, but as things stand right now, it is difficult to imagine a situation where that becomes the case.

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