GBP/USD Forecast – British Pound Shows Volatility After Interest Rate Hike

GBP/USD Forecast Video for 23.06.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied initially during the trading session on Thursday, as we continue to see a lot of upward momentum. That being said, it’s also worth noting that it was a Bank of England interest rate announcement that the market had been waiting for on Thursday, which ended up being a decision to add 50 basis points to the overnight rate, much more than the anticipated 25. Because of this, it did cause a lot of volatility and it certainly looks as if the British pound will probably continue to see upward momentum eventually. However, there are a lot of questions as to whether or not the Bank of England just “ripped off the Band-Aid” in order to get all of the pain out of the way. That will be the next question for the market, but as things stand right now, it looks as if the buyers are still very much in control.

Underneath, near the 1.2650 level, there should be a significant amount of support, as it was previously a major resistance barrier. That will be an area to watch, assuming we even get there. After all, during the Wednesday session, we formed a hammer that almost reached that level. If the market were to break above the 1.2850 level, then it’s likely that we see a continued run toward the 1.30 level which is my longer-term target as things stand. The market is probably going to continue to see a lot of noisy behavior, but I still think that there are plenty of buyers underneath. However, if we were to break down below the 50-Day EMA, it’s likely that the market could really start to break to the downside, perhaps reaching toward the 200-Day EMA.

Ultimately, the market is still very much in an uptrend, so the question now is whether or not we get some type of fundamental reason or simple momentum to come into the marketplace and start sending things higher from here. I still believe the 1.30 level very well will be a significant target but I will be watching that 50-Day EMA below for a potential trend change.

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