GBP/USD Forecast – British Pound Continues to Hang Onto Support

Christopher Lewis
Published: Sep 20, 2023, 14:18 GMT+00:00

The British pound continues to test support during the early hours on Wednesday, as the 1.2350 level is massive in its implications.

British Pound, FX Empire

In this article:

GBP/USD Forecast Video for 21.09.23

British Pound vs US Dollar Technical Analysis

The British pound has initially fallen during the trading session on Wednesday, as the 1.2350 level continues to offer support, an area that has been important multiple times. Because of this, I think we will have to wait to see what happens with the FOMC, which of course will have a major influence on the next move. In general, I think you have to look at this through the prism of whether or not the FOMC sounds hawkish, or whether or not they sound dovish. Adding more fuel to the fire, we have the Bank of England interest rate decision on Thursday, so a big mess is about to ensue.

When I look at this, it certainly looks like an area that needs to hold if the British pound wants to have any chance of staying afloat. However, if they start trading this market below the bottom of the candlestick for the Wednesday session, we could see the British pound drove all the way down to the 1.20 level. While the Federal Reserve is likely to remain tight for quite some time, the reality is that the US dollar is also considered to be a safety currency, and there are plenty of reasons out there to think that perhaps we will need to see some safety for our accounts.

If we break above the multiple inverted hammers from earlier in the week, then it’s possible that we could go look into the 200-Day EMA. The 200-Day EMA is an area that would attract a lot of technical traders, so breaking above there opens up the possibility of a move to the 50-Day EMA. In general, I think you have a situation where volatility will continue to be a major factor, and therefore it’s likely we will see a lot of back and forth, especially over the next 24 hours as both central banks will be closely watched. In general, this is a scenario where I think we’ve got to look at the various levels mentioned in this article, and therefore it could give us a bit of a “heads up” as to where we go next.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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