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GBP/USD Forecast – British Pound Pulled Back

By:
Christopher Lewis
Published: Jun 20, 2023, 13:39 GMT+00:00

The British pound has pulled back just a bit during Tuesday trading as gravity has returned.

British Pound, FX Empire

GBP/USD Forecast Video for 21.06.23

British Pound vs US Dollar Technical Analysis

The British pound initially tried to rally during the trading session on Tuesday but gave back gain as it looked like gravity is returning to the markets. Ultimately, the market has plenty of support underneath, and it’s probably only a matter of time before we see buyers come back into this market. Remember that the Bank of England has the interest rate decision on Thursday, so we may be ready to pull back to prepare for that volatility. With this in mind, it’s probably going to be a very choppy couple of days, but I do think it is probably only a matter of time before people start to look toward the British pound again. The 1.2650 level is where we have seen resistance in the past, so I think it’s probably only a matter of time before market memory comes into the picture and we start seeing buyers closer to that area.

Breaking down below that level opens up the possibility of a move down to the 50-Day EMA, but we are getting far ahead of ourselves at this point if we are expecting that. The 50-Day EMA is trading near the 1.25 level, which of course, is a large, round, psychologically significant figure that a lot of people will be paying attention to.

Keep in mind that a lot of this has to do with the idea that the Bank of England is going to have to remain very tight with monetary policy, and even though we are seeing a bit of a pullback and perhaps a lot of concerns about the global economy. Still, we don’t see people running into the greenback quite yet. With this being the case, I think it’s only a matter of time before we get some bounce. Therefore, we are about to see some “buy on the dip” type of move, but that doesn’t necessarily mean you need to be the first person to do it. In other words, take your time, and wait for the market to turn around and bounce, perhaps after Thursday to get long. As far as shorting is concerned, I have no interest in doing so at this point.

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

About the Author

Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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