GBP/USD Forecast – British Pound Gives Up Early Gain

GBP/USD Forecast Video for 30.08.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the course of the trading session on Tuesday, reaching toward 1.2650 level, an area that previously had been supported. All things being equal, it looks like we are going to continue to go back and forth as we are trying to sort things out between the 50-Day EMA above, and the 200-Day EMA underneath. The 200-Day EMA is also an area that you need to pay close attention to as there is a major uptrend line. All things being equal, I do think that we eventually go higher based on what I’m seeing in other markets, but if we do break down below that uptrend line, we could race toward a 1.2350 level. Anything underneath there could really start to send this market much lower, perhaps down to the 1.1850 level.

If we were to turn around and take out the 50-Day EMA, it brings a 1.2850 level in focus. If we were to break above there, then it is likely that we could go to the 1.30 level. 1.30 level is a large, round, psychologically significant figure that would attract a lot of attention and probably have a bit of an options barrier there as well. We are currently waiting on the jobs number coming out on Friday, and that’s probably the next mover of markets in general.

All things being equal, I think this is a situation where you have a lot of noise and confusion between now and then, so I think that we continue to do a lot of back-and-forth consolidation more than anything else. Keep in mind that the interest rate differential has essentially eviscerated between these 2 central banks, therefore I think we continue to see a lot of questions asked about what each one is going to do with inflation. That being said, both of these currencies will probably do fairly well against other currencies, but as far as each other, it’s more or less going to be a significant game of tug-of-war more than anything else as inflation is hot in both countries and of course both currencies are probably going to do well against those in smaller markets.

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