GBP/USD Forecast – British Pound Reverses Significantly on Friday

GBP/USD Forecast Video for 09.10.23

British Pound vs US Dollar Technical Analysis

The British pound initially fell during the course of the trading session on Friday, and the Non-Farm Payroll announcement only added more fuel to the fire initially. After all, the Bureau of Labor Statistics announced that the United States brought in over 300,000 new jobs last month, which was almost 3 times what was expected. By doing so, this sent interest rate spiking, but then there has been a complete turnaround later in the day. Is this a trend change? I highly doubt it but we have been oversold for so long that it does make a certain amount of sense that we get a bounce.

When I look at the chart, the 1.2350 level above is an area that I will be paying close attention to. If we see signs of exhaustion, then I am more than willing to start selling signs of exhaustion. We recently had the “death cross” when the 50-Day EMA breaks down below the 200-Day EMA, which is typically a longer-term cell signal.

Alternatively, the 1.20 level has offered a significant amount of support and a bit of a bounce, so at this point it’s likely that we will continue to see the market pay attention to that, and I think it’s probably a nice target. If we break down below there, then we could go down to the 1.1850 level, which is a huge area of support in the past, where we had a swing low and a huge bounce appear. Breaking down below that level could open up drastic selling.

That being said, keep in mind that the markets never move in the same direction forever, so this bounce should end up being an opportunity to pick “cheap US dollars”, unless of course something fundamentally changes, something that I just don’t see happening at the moment. Part of this may have been profit-taking heading into the weekend. That being said, once we finally see some sign of exhaustion between here and the 1.2350 level, then I will start selling again. In fact, as I record this, the market is struggling to break above the top of a shooting star from several candlesticks ago.

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