GBP/USD Forecast – British Pound Hesitates Heading Into the Weekend

GBP/USD Forecast Video for 17.07.23

British Pound vs US Dollar Technical Analysis

The British pound has done very little during the day on Friday, as we continue to see upward momentum, but quite frankly as we head into the weekend a lot of people will be willing to take profit. Keep in mind that a lot of what has happened over the last couple of days, has been due to inflation numbers in the United States cooling. The idea that inflation is going to cool off suggests that perhaps the US dollar may drop and therefore it’s by extension that the British pound should continue to go higher.

A short-term pullback could send the British pound back down to the 1.30 level, which is a large, round, psychologically significant figure. If we were to break down below there, then we could go look into the 1.2850 level, where we had previously seen previous resistance. There is also an uptrend line sitting just below there, and of course the 50-Day EMA. The 50-Day EMA is an indicator that a lot of people pay close attention to, and it has also offered something similar to a trendline.

On the other hand, if we were to turn around and take off to the upside, breaking above the 1.3150 level could open up the possibility of a move to the 1.3250 level, and then possibly the 1.35 level. All things being equal, this is a situation where I do believe that there will be a lot of buyers coming in to pick up value, and that probably is the play here as we have been a bit overextended. In general, this is a market that I do think it was higher, but as we are a little overdone to the upside, I would be looking for some type of pullback to appear in the market in the short term, offering a bit of an opportunity to pick up “cheap British pounds” down the road. The candlestick from the previous session was rather bullish, but probably a little overdone anytime soon.

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