GBP/USD Forecast – British Pound Looks for Buyers

GBP/USD Forecast Video for 21.07.23

British Pound vs US Dollar Technical Analysis

The British pound has experienced a noticeable decline against the US dollar, as the greenback has displayed signs of strength. The pound is currently testing the key 1.29 level, which holds psychological significance as a round figure.

If the pound breaks below the 1.29 level, it may open the door for a test of the 1.2850 level, which could act as a support zone due to its prior role as resistance. Additionally, below this level lies the 50-Day Exponential Moving Average, coinciding with an upward trend line, creating a favorable confluence for potential support. Traders will closely monitor these levels for signs of a bounce-back.

Conversely, if the market reverses course and moves upwards, it may encounter resistance around the 1.30 level. A successful breach of this barrier could pave the way for further gains, with the next target being the 1.3150 level. With sustained momentum, the British pound could potentially trade at the 1.3250 level over time. This suggests that the pound may present buying opportunities for traders on dips.

It is important to note that the dynamics of the pound’s performance will primarily revolve around the strength of the US dollar. Therefore, monitoring the greenback’s movements against other currencies is crucial. While the US dollar has exhibited some strength, it is worth highlighting that the British pound has been relatively resilient compared to other currencies in recent times. As a result, this currency pair is expected to maintain a degree of strength before succumbing to downward pressure.

Personally, I am waiting for signs of support before entering the market and initiating new buying positions. However, observing the actions of other traders who attempt to anticipate market moves can provide valuable insights. By carefully assessing signs of support and resistance, traders can identify favorable buying opportunities and time their entries effectively.

In the end, the British pound is currently under pressure against a resurgent US dollar. The pound’s performance will be heavily influenced by the overall strength of the greenback. While caution is warranted due to the potential for US dollar strength, it is essential to recognize the pound’s recent robustness. Traders should carefully assess signs of support to identify favorable buying opportunities, while also remaining vigilant and observing the actions of their peers as indicators of potential market moves.

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