GBP/USD Forecast – British Pound Continues Its Overall Consolidation

GBP/USD Forecast Video for 11.08.23

British Pound vs US Dollar Technical Analysis

The British pound initially shot higher after the CPI readings in the United States, and of course the unemployment claims. That being said, the market doesn’t look like it’s got enough momentum to continue going higher, with the 50-Day EMA offering a little bit of a magnet for price. At this point, it looks like we are just consolidating right above the 1.2650 level, which is an area that has been important a couple of times. Ultimately, if we break down below there then we have to deal with the uptrend line and the 200-Day EMA that both offer support. If we were to break down below the 200-Day EMA, then the market could go much lower. At that point, then the trend would change. Until then, this is more or less going to either be a sideways or a “buy on the dips” market.

A break above the 1.28 level opens up the possibility of a move to the 1.30 level, but I think at this point in time it probably takes quite a bit of effort to actually make that happen. The 1.30 level of course is a large, round, psychologically significant figure, in an area where we’ve seen some noise in the past. Breaking up over there then opens up the possibility of a move to the 1.3150 level, which was the most recent high.

Keep in mind that the Bank of England continues to keep its monetary policy very tight, while the Federal Reserve does the same. In that environment, the market doesn’t really see a huge differential between the 2 currencies, so expect a lot of choppy and sideways action in general. However, we are in an uptrend overall, so therefore you have to favor the upside, albeit somewhat slightly at this point.

Quite frankly, I like both of these currencies at the moment, so I don’t necessarily like playing them against each other but it does offer a bit of a secondary indicator as to which currency you might want to own against others. In other words, the winner here should continue to be a winner elsewhere.

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