GBP/USD Forecast – British Pound Continues to Suffer at the Hands of the Greenback
GBP/USD Forecast Video for 03.10.23
British Pound vs US Dollar Technical Analysis
The British pound gapped lower to kick off the Monday trading session, but then turned around to show signs of strength again. By doing so, the market then sold off to show an attempt to break down below the 1.21 level, which is where we are approaching as I write this article. If we do break down below the 1.21 level, then it’s likely that the British pound will probably go down to the 1.1850 level underneath, which is a major support level. I do think this eventually gets hit, but it might take a while to get there.
Short-term rallies continue to be selling opportunities as the British pound will continue to be looked at cautiously due to the fact that the UK economy is teetering on some type of stagflation issue, as well as could be very susceptible to problems coming out of the European Union. Furthermore, the US dollar attracts a certain amount of money due to the fact that it has shown itself to be a safety currency, especially when interest rates in that country continue to rally. As long as interest rates in the United States continue to strengthen, that makes the US dollar more attractive, and you have to be able to recognize where money is best treated. At this point, it certainly seems as if it’s the United States, and now that we have broken through major support, it’s likely that we continue to grind much lower.
It’s also worth noting that the 50-Day EMA is getting ready to cross below the 200-Day EMA, kicking off the “death cross” that a lot of people pay close attention to. This is a very bearish long-term signal, and therefore it’s likely that a lot of longer-term traders are short of this market. Whether or not we can break down below the 1.1850 level below remains to be seen, but that’s an argument for another day as we are still about 300 pips from that potential target and support region.
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