GBP/USD Forecast – British Pound Soars During the Thursday Session

GBP/USD Forecast Video for 07.07.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied rather significantly during the trading session on Thursday, as we continue to see a lot of strength with Sterling. All things being equal, it looks as if traders are expecting higher interest rates coming out of the United Kingdom, which is a positive for the currency. Furthermore, the market has been an uptrend for a while, so it does suggest that we will have continuation. Because of this, it’s very likely that the market will go looking to reach the 1.30 level, an area that obviously has a significant amount of psychological importance, and in the past has been important.

Underneath, the 1.2650 level offers significant support, especially as the 50-Day EMA is racing toward that area. Underneath there, then the market could go down to the 200-Day EMA, which is near the 1.2350 level. That’s an area that previously has been important, and therefore I think you’ve got a scenario where that’s the absolute “bottom in the market” at the moment. If we were to break down below there, it would obviously be very negative, but we are quite some distance from that level. The size of the candlestick is also important, because it tells you just how bullish the market is. Now that we have seen a bit of an impulsive move, it does suggest that eventually we will break out to the upside.

Short-term pullbacks will more likely than not be buying opportunities, but I would anticipate a lot of volatility, and of course choppy behavior. Given enough time, I do think that we break out to the outside and go much higher, but I also recognize that it could be very difficult to sustain momentum in an environment that is so uncertain from a global economic standpoint. Because of this, we may have the occasional run toward the US dollar, as people are looking for safety, which is the longer-term correlation to that currency. In general, I think we continue to buy dips, at least until something has changed from a fundamental standpoint, and the Bank of England changes its overall stance, something that seems very unlikely anytime soon.

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