GBP/USD Forecast – British Pound Continues to Drift Lower

GBP/USD Forecast Video for 03.08.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the day on Wednesday, but continues to drift a little bit lower after turning around. We broke below the 50-Day EMA, but quite frankly I don’t think it means much, as there are plenty of support levels just below that could come into the picture. Furthermore, we have the Non-Farm Payroll announcement coming out on Friday, and a lot of people will more likely than not try to figure out whether or not we are going to see the US dollar strengthen, or if the Federal Reserve will see unemployment figure that gives them the opportunity to slow down.

All things being equal, this is a market that has plenty of support near the 1.2650 level, and of course the trend line just below there. That doesn’t necessarily mean that I’m jumping in and buying right away, but I would like to see some type of turnaround or bounce that successfully turns around the downward momentum. When you look at the longer-term chart, it’s clear that we are in an up-trending market, so therefore it’s only a matter of waiting for some type of value and then confirmation. I have no interest whatsoever in trying to get too cute with this, because you can see that although we have pulled back a bit, the big scheme of things has not been a big deal.

In fact, it’s not until we break down below the 200-Day EMA that I would consider shorting the British pound, and even then I would have to see how the US dollar is doing around the world. Quite frankly, if I want to buy the US dollar, I will buy it against something else like the Swiss franc, because you get paid to hang onto it. While the US dollar could pick up a little bit of momentum, I think ultimately the market still needs to prove itself, so by the time we get done with the Friday session, we may have a bit more clarity. In the short term, I think we just kind of bounce around in this general vicinity.

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