GBP/USD Forecast – British Pound Has a Quiet Monday

GBP/USD Forecast Video for 31.07.23

British Pound vs US Dollar Technical Analysis

The British pound has done very little during the trading session Monday, as we are trying to determine whether or not the 50-Day EMA is going to continue to support the market. If we were to stay above there, then I think it opens up the possibility of this move going to the 1.30 level above. The 1.30 level has recently been significant resistance, and of course it is a situation that has a lot of psychology attached to it as it is a large, round, psychologically important figure.

On the other hand, if we turn a breakdown below the 50-Day EMA opens up a move down to the 1.2650 level. The 1.2650 level is an area that has been important multiple times, so you do need to keep an eye on that. Underneath there, then you have an uptrend line that the entire market is probably paying attention to.

All things being equal, I think what you do have here is a situation where we will see a lot of noisy behavior. That noisy behavior lends itself to being a choppy environment, and therefore you have to look at this through the prism of a short-term back-and-forth range bound endeavor. Whether or not we can continue to go higher over the longer term remains to be seen. However, I don’t necessarily think that this is a market that we are going to see some type of major meltdown either, so therefore I think we are entering a time of indecision and indifference.

This does make a certain amount of sense, due to the fact that August is typically a very quiet trading month anyway. After all, most traders are away on holiday, and not overly concerned about what’s going on with the screens. Obviously, some type of major macroeconomic event could change everything, but right now this looks like a market that has all the earmarks of grinding sideways and not necessarily going anywhere anytime soon. That being said, I am much more comfortable buying short-term dips that I am shorting this market, unless of course there is a huge run to the US dollar for safety.

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