GBP/USD Forecast – British Pound Gives Up Early Gain

GBP/USD Forecast Video for 18.09.23

British Pound vs US Dollar Technical Analysis

The British pound has initially tried to rally during the trading session on Friday but gave back gains to show signs of hesitation yet again. Ultimately, this is a very weak looking chart, and therefore I think you’ve got a shot at reaching down to the 1.2350 level, which is an area that previously was significant support. That being said, if we break down through that level and then opens up the possibility of a move all the way down to the 1.20 level.

I do not believe that we will get any type of significant rally, but if we do break above the 1.25 level, you would have to start to think about the possibility of a turnaround and this pair. After all, the US dollar is considered to be a safety currency, and there are a lot of people out there that need safety at the moment. Furthermore, you also have the short term interest rates rising, and that makes the US dollar much more attractive than other currencies. But frankly, we have an interest rate decision coming up soon and is going to be interesting to see what Jerome Powell has to say or do, because Fed Fund Futures suggest that there is only a 3% chance of an interest rate hike, so this may come down to his oratory skills. After all, the Federal Reserve is more likely than not to have to continue raising rates, as oil itself is up 28% or so this year. That is very inflationary, and the Federal Reserve is nowhere near getting to where it needs to get.

If we break down below the 1.23 level, then I think you start to see a bit of a flush lower, perhaps down to the 1.20 level, which of course is a significant amount of support just waiting to happen. The British pound itself is struggling at the margin due to the fact that the British economy is starting to slow down, and there are a lot of concerns about a recession coming out of the EU, which of course has a major influence on the UK economy as well.

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