GBP/USD Forecast – British Pound Plunges Against the Greenback

GBP/USD Forecast Video for 29.06.23

British Pound vs US Dollar Technical Analysis

The British pound initially plunged during the Wednesday trading session as it looks like we are revisiting the 1.2650 level again. This is an area that previously had been significant resistance, so it does make a certain amount of sense that there will be “market memory” attached to it. Because of this, I would anticipate that buyers will return to the picture, especially as the market has been in such a strong uptrend. The Bank of England continues to see plenty of reasons to fight inflation. Therefore, it should keep the British pound somewhat strong over the longer term.

That being said, it does make a certain amount of sense, so we had to pull back, because of gravity if no other reason. After all, the market cannot go in one direction forever, but it does look like we will eventually go much higher. The 50-Day EMA is reaching higher, and we will probably intercept that somewhere closer to the 1.2575 level if we continue to fall. On the other hand, if we turn around about some here, I see no reason why we would not go looking to the 1.2750 level, possibly even the 1.2850 level after that.

Longer term, the British pound will reach the 1.30 level if fundamental news remains the same. Remember, there is a lot of inflation out there, therefore central banks will have to remain very tight. All things being equal, I think we have more of a “buy on the dip” mentality. If we do break down below the 50-Day EMA, then it’s possible that we could go down to the 1.2350 level, which is closer to the 200-Day EMA.

Be cautious with jumping in with a huge position, but we should be in an area where a lot of people start to look for support and buying opportunities as the British pound continues to grind its way higher over the longer term. Ultimately, this is a market that I have no interest in shorting until we break down below the 1.2350 level, something that’s not going to happen anytime soon. Because of this, I remain bullish in the longer term but also recognize that it is going to take value to get this market turned around.

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