GBP/USD Forecast – British Pound Continues to Test Upside
GBP/USD Forecast Video for 21.11.23
British Pound vs US Dollar Technical Analysis
The British pound that sits just above the 200-Day EMA, which has offered a significant amount of support of the last couple of days. That being said, the British pound has found a lot of resistance near the 1.25 level, so it’ll come down to whether or not we can take out the level on a daily close. Breaking above that level opens up the possibility of a move to the 1.2750 level, which is an area where we see a lot of noise in the past. Underneath, the 200-Day EMA looks as if it is trying to continue to hold as support, and it’s also worth noting that the previous channel sits just below, which could offer a bit of “market memory based support” as well.
If we break above the 1.25 level, I think that will bring in fresh buying, and of course we need to pay close attention to the 10 year yield in the United States, because if it continues to drop, it’s very likely that traders will look at this through the prism of whether or not the Federal Reserve is going to step away from its tightening policy. If it does, or at least it looks like the Federal Reserve is going to keep things stable, the reality is that the US dollar could be a big loser.
On the other hand, if we break down below the 1.2350 level, then it’s possible that we could go looking to the 1.22 level, which is essentially the bottom of the previous up trending channel. Anything below there would of course be very negative for the markets, perhaps sending the British pound much lower. I don’t think that happens, at least not in the short-term environment.
All things being equal, this is a market that I think continues to be very noisy and choppy, and therefore you need to be cautious with your position sizing but it certainly looks as if buyers are at least trying to push to the upside. Given enough time, we could see a bigger move, but in the short term and between now and the end of the year, it’s very likely that we will continue to see noisy behavior more than anything else.
For a look at all of today’s economic events, check out our economic calendar.