GBP/USD Forecast – British Pound Is Attempting to Rally

GBP/USD Forecast Video for 10.10.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back just a bit during the trading session on Monday, as it looks like we are trying to sort out where risk appetite is going to go. We have turned around to show signs of stability, and this is probably not a huge surprise, given the fact that the main driver of currency markets has been the bond markets and interest rates, and of course as it was Columbus Day in the United States, the bond markets were closed. Because of this, it does make sense that the traders out there may be trying to guess as to what the market will do when it opens on Tuesday, as some people may believe that people will run into bonds, driving down rates, but at the same time that requires US dollars, so that could of course help the greenback even if rates to fall.

At this point, the market is probably more or less oversold, and therefore I think that an oversold rally probably makes a certain amount of sense, with a 1.2350 level above being a major resistance barrier. It’s worth noting that we recently formed the so-called “death cross”, which of course is a longer-term technical signal that some traders pay close attention to.

That being said, when I look at this chart, I would expect to see some type of opportunity to start buying US dollars again at this rally, so I might be sitting on my hands for a couple of days. If we broke above the 1.2350 level, then it’s possible that we could see a reversal, but that would obviously take a significant amount of momentum to make that happen, something that I just don’t see at the moment. What we need to see at this point is a nice selling area to get involved in the market, and start selling British pounds again. Underneath, the 1.1850 level continues to be the longer-term target, with the 1.20 level underneath an area that could offer support again once we get close to it.

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