GBP/USD Forecast – British Pound Drifts Lower

GBP/USD Forecast Video for 13.09.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the trading session on Tuesday but gave back gains as it looks like we are ready to break down even further. Pay close attention to the CPI numbers on Wednesday, because that could be the “final nail in the coffin”, as the market is likely to favor higher interest rates. Speaking of higher interest rates, we have seen the short end of the yield curve pick up a few basis points here and there over the last couple of days, so that certainly helps the greenback.

The 1.2350 level underneath is an area of support, and that could be your next target. All things being equal, I think this is going to continue to be noisy, but it certainly looks as if rallies offer resistance and selling opportunities. If we break above the 1.25 level, then it’s possible that we could go look into the 50-Day EMA above which is near the 1.2650 level. If we were to break above there, then it could change the overall recent attitude. We are hanging around the 200-Day EMA at the moment, and that most certainly will attract a lot of attention as it is typical support from a longer-term standpoint.

Looking at this chart, it is going to be very noisy, and therefore we could see a lot of back-and-forth, and therefore I would be cautious about my position sizing. I believe that CPI will be a major influence over the next couple of days, but I would say that if we break down below the 1.2350 level, then it’s likely that the market could drop all the way down to the 1.20 level, maybe even the 1.1850 level after that. In general, this is a market that is going to continue to look at risk appetite as a major driver, and therefore you do have to pay attention other markets, and I would also be cautious about position sizing, at least over the next 24 hours. Once we get through CPI, I will probably add to my position, once the market has shown itself to be stable. I think we’re coiling up right now and trying to sort out the next move.

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