GBP/USD Forecast – British Pound Gives Up Early Gain

GBP/USD Forecast Video for 16.10.23

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 rather quickly as we continue to see a lot of noisy behavior. That being said, the market is likely to continue to be a dangerous place to be, and I do think that we continue to see sellers coming into the market and take advantage of short-term rallies. After all, we have a lot of concerns out there when it comes to the global economy, therefore the US dollar will continue to be a major winner when it comes to interest-rate differential.

The British pound of course has to deal with the fact that the market is pricing in some type of economic downturn in the UK. With so many geopolitical issues out there, it does make a lot of sense that we would see the US dollar attract a lot of attention as it is considered to be a “safety currency.” The market looks likely to see a lot of volatility, and therefore I think that every time we rally, you have to assume that the British pound is going to lose some value.

If we were to break above the highs of the day, that would obviously be a very bullish sign, but right now I just don’t see that happening. It looks like there is plenty of momentum for the US dollar at this juncture, and this is going to continue to be the way forward. With this in mind, I remain bearish on this market and I think most people will probably feel the same way as there are too many things out there that could cause issues.

Breaking down below the 1.20 level would be very negative, sending the British pound reeling at that point, perhaps opening up a move all the way down to the 1.1850 level, where we had seen a lot of support previously. With this, I am cautious, but I do recognize that the downside has seemingly won the day yet again and any rally at this point in time should be a selling opportunity.

For a look at all of today’s economic events, check out our economic calendar.