GBP/USD Forecast – British Pound Continues to Sit Just Below 50-Day EMA

GBP/USD Forecast Video for 14.08.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the day on Friday, but gave back gains near the 50-Day EMA. The 50-Day EMA of course is an indicator that a lot of people pay close attention to, and therefore I would anticipate seeing a lot of short-term resistance in that area. If we can break above there, and we did do so during the previous session on Thursday, we need to be able to stick to that move. Breaking above the highs of the Thursday session opens up the possibility of a move to the 1.30 level.

Underneath, the 1.2650 level is an area that I think a lot of people will pay close attention to, and therefore you need to look at that as a potential “floor the market.” It has shown itself to be important in a couple of times, so don’t be overly surprised if it continues to hold the market. That being said, if we were to turn around a break above the 1.28 level, that it opens up a move to the 1.30 level above, which of course has a lot of significant importance attached to it, and there is the possibility that the area offers a lot of resistance. If the market does break above there, then it’s possible that the 1.3150 level would be a target.

On the other hand, if the market were to break down below the uptrend line that I have on the chart, then the 200-Day EMA would be targeted. The 200-Day EMA is the bottom of the overall trend, and in that environment you would almost certainly see the British pound get hammered. The US dollar has been rather strong, so it is worth noting that if we break out here, it’s probably going to absolutely clobber some of the other currencies that have struggled a bit more than Sterling has.

All things being equal, I think we consolidate in the short term, as we try to sort out where we are going longer term. This is a scenario where we need to sort out what the central banks and both London and Washington DC are going to do, and therefore I think we continue to see a lot of noise.

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