GBP/USD Forecast – British Pound Continues to Hang Around the 50-Day EMA

GBP/USD Forecast Video for 10.11.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the course of the trading session early hours on Thursday, as we are sitting just below the crucial 50-Day EMA indicator. If we can break above there, then it’s possible that the market could go higher, perhaps reaching the shooting star from the Monday session. It’s at the shooting star from Monday that I think a lot of attention will be paid, because not only did we form that bearish candlestick, but it was also right at the top of the bearish flag body, and then of course the 200-Day EMA causing a lot of confluence for technical traders to think about selling.

At this point, I think it is probably only a matter of time before shorting comes back into the picture, and I do like the idea of selling this market on short-term rallies that show signs of exhaustion. If we break down below the bottom of the hammer from the Wednesday session, then I think it’s very likely that the British pound continues to drop toward the 1.21 level underneath there. That would put as close to the bottom of the bearish flag, and then set up a potential breakdown for an even deeper drop from there.

Keep in mind that the interest rates in the United Kingdom are relatively high, so the British pound has been putting up a bit of a fight against not only the greenback, but everything else recently. It is because of this that I think it’s probably going to have a little bit more strength against the US dollar than many other currencies going forward, but at the end of the day, if the market is going to continue to worry about geopolitical events and recessionary headwinds, the US dollar should end up doing fairly well. There may be the occasional knee-jerk reaction of people hoping that the Fed will start to cut rates again, but at the end of the day that tends to be wishful thinking more than anything else. The Federal Reserve doesn’t seem like it’s ready to change its policy anytime soon.

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