GBP/USD Forecast – British Pound Continues to Stretch Higher

GBP/USD Forecast Video for 22.11.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied again during the trading session on Tuesday to break above the 1.25 level, an area that of course is a large, round, psychologically significant figure and an area that will attract a lot of attention. The market recently has seen that area as support, and now it could offer a bit of resistance but now that we are above this level, I think it’s probably more likely than not that we will continue to see the market in more of a “buy on the dips” mentality going forward. Whether or not this is a longer-term mover remains to be seen, but clearly in the short term we have a lot of upward pressure, and a lot of people are selling the US dollar as they believe that falling interest rates will continue to be negative for the greenback.

There is a big hope out there than the Federal Reserve is going to loosen its monetary policy, or possibly at least pause, and that has people celebrating by shorting the greenback. That being said though, typically one interest-rate spike and then start to drift lower, that’s a sign that we are heading into a recession and that could end up being good for the US dollar of the longer-term. In the meantime, probably not so much so therefore most traders will be looking to pick up “cheap British pounds” when they can. In fact, I think at this point we need to break back below the 200-Day EMA, which recently has shown itself to be rather supportive, before we can start selling again.

It’s not even a matter of whether or not I am bullish on the British pound, it’s just a simple matter of momentum which seems to be skewed to the outside. Also, you have to keep in mind that this is a holiday week in the United States, so it will take a lot of the liquidity out of North America on both Thursday and Friday as the Thursday session is Thanksgiving in America. Expect a lot of choppiness, but at this point in time it looks like the buyers are most certainly in control.

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