GBP/USD Forecast – British Pound Finds Buyers on the Dip

GBP/USD Forecast Video for 18.07.23

British Pound vs US Dollar Technical Analysis

The British pound has shown itself to be somewhat resilient during the trading session on Monday. Ultimately, this is a scenario where the US dollar will be the main driver of everything going forward, as it seems like the only thing most traders are worried about is the Federal Reserve and interest rates. As long as they continue to drift a little bit lower, that is the possibility that the British pound will really take off. On the other side of the Atlantic, you have the United Kingdom fighting inflation as hard as it can, and of course seems to have more inflationary headwinds than America.

Underneath, the 1.30 level should offer support, as it is a large, round, psychologically significant figure. The breakdown below that level then opens up the possibility of a move down to the 1.2850 level, an area that has been important previously. We are very much in an uptrend, and therefore I have no interest in trying short this market, at least not until we break out below the major trend line underneath and the 50-Day EMA, trading extensively at the 1.2650 level.

On the upside, we could see the British pound look into the 1.3250 level, which is an area where we have seen noise before. Breaking that opens up the idea of the move to the 1.35 handle on the longer-term move, but I do think that it probably takes a while to get there. Regardless, I do like the idea of buying this market on dips and I think it offers value in those circumstances. After all, the British pound has been one of the better performing currencies in the world as of late and I just don’t see how that changes anytime soon. With this in mind, I am bullish but I also recognize that there is a little bit of an overextension at the moment. Because of this, it’s worth noting that the pullback probably offers value that a lot of people will be willing to take advantage of.

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