GBP/USD Forecast – British Pound Gives Up Early Gains

GBP/USD Forecast Video for 02.10.23

British Pound vs US Dollar Technical Analysis

The British pound has shown itself to be rather wanting during the trading session on Friday, as the rally that started out the day was crushed. With this being the case, it looks like we have further to go and it also looks as if the US dollar is almost certainly going to continue to be the stronger of the 2 currencies. In fact, it’s very likely that the British pound will eventually find its way down to the 1.1850 level, but it may take some time to get there. Ultimately, I am still going to continue to fade rallies, as I think it is only a matter of time before that breakdown occurs. That being said, if we were to break above the top of the candlestick for the trading session on Friday, that could be a very bullish turn of events.

In that scenario, we could see the market go looking to the 1.2350 level, which I think is a very significant resistance barrier due to the fact that it was previous support. “Market memory” would have something to say about this, so I do think that it is probably only a matter of time before we see a “fade the rally” move in that general vicinity. Looking at this chart, it certainly seems as if we’ve got some issues, and I think that sellers will continue to step into this market and take advantage of “cheap US dollars” every time there is a move higher.

The Federal Reserve remains extraordinarily tight, and that is going to continue to be a major function of where this market goes, while the United Kingdom has to worry about the European Union recession bringing its economy down as well. Because of this, the British pound will continue to be a victim as well, and therefore it’s likely that we would see more traders run toward the US dollar than the British pound, and that’s exactly what the market showed during the Friday session. Ultimately, we are going lower, but expect a lot of volatility in both directions along the way. Because of this, you need to keep your position size reasonable.

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