GBP/USD Forecast – British Pound Pulls Back to Find Buyers

GBP/USD Forecast Video for 23.10.23

British Pound vs US Dollar Technical Analysis

The British pound fell a bit during the course of the trading session on Friday, only to turn around and show signs of life. This is a very similar reaction to what we had on Thursday, and therefore I think we could be in the midst of trying to bounce a bit. And a little bit of a bounce from here probably finds exhaustion that people can start selling into. Ultimately, this is a market that I think will continue to see a lot of volatility. I would be very interested in the 1.2250 level, as a potential selling opportunity. On the other hand, if we break above there and go looking to the 1.2350 level, then the 50-Day EMA comes into the picture to offer a bit of a barrier as well.

If we break down below the bottom of the last 2 candlesticks, then it opens up more FOMO, perhaps sending the market down to the 1.20 level, and then the 1.1850 level after that. The 1.1850 level has been important more than once, and it has a certain amount of market memory attached to it. We had bounced significantly from there in the past, so it does make a certain amount of sense that it would offer significant support, and perhaps even a nice target. Anything below there would more likely than not open up the possibility of a disastrous selloff, but right now I think that is a bridge too far.

On the upside, the 1.2350 level is essentially the ceiling in the market, and with the 50-Day EMA being there, a lot of technical resistance will be found there as well. Keep in mind that the US dollar could be favored due to geopolitical concerns alone. Ultimately, we also have to pay close attention to the UK, because it is so highly levered to the European Union which is almost certainly going to go into a recession. Ultimately, this is a market that I think continues to be very noisy, but I pick up “cheap US dollars” every time I get an opportunity by fading short-term rallies to show signs of exhaustion.

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