GBP/USD Forecast – British Pound Continues to See Noise

GBP/USD Forecast Video for 14.09.23

British Pound vs US Dollar Technical Analysis

The British pound has fallen a bit during the course of the trading session on Wednesday, as we continue to see a lot of noisy behavior, and it is probably worth noting that Core CPI in the United States came out hotter than anticipated on Wednesday, so that does put a little bit a downward pressure on this pair. However, we are also sitting right around the 200-Day EMA, so it’ll be interesting to see how this plays out.

If we were to break down below the lows of the Wednesday session, that could open up a bigger move down to the 1.2350 level, an area that had previously been supported. That being said, the Monday session was a very bullish candlestick, so if we were to break above the top of the candlestick, it’s likely that we could go look into the 50-Day EMA. That is currently at the 1.2650 level, which is an area that previously has been important as well.

All things being equal, this is a market that I think continues to see a lot of noise, as traders are out there trying to determine what the next move by central banks will be. Ultimately, we have the Federal Reserve statement coming out just around the corner, and that will have a major influence on what happens with the US dollar. Most traders are starting to think that the Federal Reserve is close to the end of its tightening cycle, but the question remains as to how long they will stay tight.

The Bank of England has recently sounded a little bit more dovish, and that has weighed upon the British pound. Whether or not that ends up being an actionable trade remains to be seen, because we are hanging around a major technical indicator in the form of the 200-Day EMA. Because of this, I am more apt to let the market do what it’s going to do, and just simply follow on the next impulsive candlestick as to the direction. In the meantime, I’m just waiting and watching to see what the bigger traders out there wind up doing.

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