GBP/USD Forecast – British Pound Hangs Around the 200-Day EMA

GBP/USD Forecast Video for 11.09.23

British Pound vs US Dollar Technical Analysis

The British pound has bounced a bit during the trading session on Friday, as it looks like we are hanging around the 200-Day EMA and trying to sort out where we’re going next. If we can break above the top of the candlestick for the Friday session, then it’s likely that the British pound may recover a bit. The 1.2650 level above is a major barrier that a lot of people will be focusing on, especially as the 50-Day EMA is sitting right around that area as well, and that could lead to quite a bit of volatility.

Keep an eye on the US dollar in general because it has been strengthening and that should be something that you have to pay close attention to not only in the currency markets, but you should also pay attention to the interest rate situation in America, because if it continues to strengthen, that will almost certainly drive the US dollar higher.

That being said, the British pound has been a better performer against the greenback than many others, so even if we do see a bit of a drop from here, it may not be as bad as many other currency pairs. The 1.2350 level underneath should be supported, but if we were to break down below that level, then the market really starts to fall apart. In that environment, I would anticipate a drop to the 1.20 level, which of course is a large, round, psychologically significant figure. On the other hand, if we see a break to the upside, it’s likely that we will see an attempt to get back to the 1.30 level over the longer term.

You have to pay attention to statements coming out of the Federal Reserve, and of course the interest rate decision that is upcoming for September. Traders believe at this point that the Americans may not raise rates, at least not this month, so that could provide a little bit of a reprieve for the pound. However, you also have to pay attention to the Bank of England and what they plan on doing, and it is worth noting that it looks like growth is slowing down globally, so it could have a major influence on what central banks are getting ready to do overall.

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