GBP/USD Forecast – British Pound Continues to Hang Around 200-Day EMA

GBP/USD Forecast Video for 20.11.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Friday, as we continue to hang around the 200-Day EMA indicator. This is interesting, because not only is the indicator itself important, but the 1.24 level has been important also. Remember, this is the top of that bearish flag that we had formed previously, and now people have to wonder whether or not there is a certain amount of “market memory” in this area.

If we can break above the top of the candlestick for the trading session on Thursday, that would be a very bullish sign and could open up the British pound to attack the 1.25 level again. At this point, a lot of people are out there believing that the Federal Reserve is going to either loosen its monetary policy, or at the very least is nowhere near tightening it again. As long as that’s the case, then we may see other currencies do fairly well against the greenback. However, we also have to worry about geopolitical concerns, and this of course is going to make the markets very noisy.

If we break down below the lows of the Thursday and Friday candlesticks, then it’s possible that the British pound could go looking to the 50-Day EMA, although at this point that looks less likely. Regardless, you have to keep both points of view in the back of your mind, because it would only take one bad geopolitical announcement to make the US dollar spike, and of course we also have to keep in mind that the United Kingdom may head into a recession driven by the European Union.

Financial markets never react the way you think they should, and at this point you need to keep in mind that some people may be looking to the pound as a way of getting away from the US dollar, despite the fact that there might be a recession. The recession has the Federal Reserve loosening monetary policy, and traders around the world celebrating in a “risk on move” overall. This is the dynamic that we have been in for 15 years now, and I just don’t see it changing.

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