GBP/USD Forecast – British Pound Gives Up Early Gain to Continue Trend

GBP/USD Forecast Video for 25.10.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday, but gave back gains near the 1.23 level. The 1.23 level of course is a big figure, but it is also worth noting that the market has a long wick to the upside, so it does suggest that the market is going to continue to struggle. At this point, the 1.2150 level is probably where the market is heading, which is essentially where the bottom of the flag is. Remember, we have been working on a bearish flag, so now the question is whether or not we break down through the bottom of the flag. If we do, then it opens up the 1.20 level underneath it as a potential target.

That being said, the 1.20 level has been sliced through a few times, and therefore I don’t think it carries the same weight as it once did. Because of this, I think we would then go look into the 1.1850 level, a support level in the past that we have not tested recently. This does make a certain amount of sense as interest rates in the United States continue to be a lot hotter than anticipated, and the Federal Reserve is likely to keep those rates very high.

Even if we were to turn around and rally, the 50-Day EMA comes into the picture as major resistance, and therefore I think it essentially makes up the “ceiling in the market” at the moment. If we break above that, then it’s possible that we could go looking to the 200-Day EMA, but that seems to be very unlikely at this point. With that being the case, I think we’ve got a situation where the market is simply going to continue to be a “fade the rally” type of situation, which has been the case for quite some time.

With this being the case, I don’t have an interest in buying this pair anytime soon, and I recognize that we have to look at this through the lens of negativity going forward as the interest rates in America continue to be a major driver and of course we also have geopolitical concerns driving money into the greenback as well.

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