GBP/USD Forecast – British Pound Forming “Death Cross”

GBP/USD Forecast Video for 06.10.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the trading session on Thursday, as we continue to see a lot of noisy behavior. Alternatively, the US dollar is the only currency in the spare that I’m interested in owning, but we could get a short-term bounce. That bounce could be a nice opportunity to start selling again, but at this point in time I need to see some type of exhaustion to get involved. Furthermore, you also have to get past the jobs number on Friday, so I’m not necessarily overly excited about jumping in right away. The next 24 hours of course could be very noisy.

We have seen the “death cross” form in the last 24 hours, when the 50-Day EMA breaks down below the 200-Day EMA, a longer-term bearish signal. Because of this, there are a certain number of traders out there that will be looking to short this market based on that alone, although it is an extraordinarily slow signal to happen.

Ultimately, this is a market that is in a bearish trend, and even though we are due some type of bounce, one would have to think that the 1.2350 level could be a significant resistance barrier, as it was previous support. Any rally toward that area will have to contend with the higher interest rates in the United States, and of course the fact that the short end of the yield curve continues to show higher rates going forward. That being said, the jobs number could have a major influence on the market, and quite frankly I would love to see this market shoot straight up in the air, so I can start selling again.

Underneath, the 1.20 level is an area of course that does attract a certain amount of support, and if we were to break down below there, then we could go to the 1.1850 level. The 1.1850 level underneath is a major support level that has been important several times in the past, so I think that makes for a nice target if we do eventually break down, which I suspect we will.

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