GBP/USD Forecast – British Pound Stabilizes a Bit

GBP/USD Forecast Video for 07.09.23

British Pound vs US Dollar Technical Analysis

The British pound has been somewhat choppy during the trading session on Wednesday, as it looks like we are trying to stabilize above the 200-Day EMA. This of course is an area where a lot of people will be paying close attention, as it is a technically driven indicator that a lot of people will use as a determination of the overall trend. That being said, I do think this is a situation where the market will eventually try to sort itself out and determine whether or not we are still in an uptrend, and it could be over the next couple of days that we finally make some type of decision. After all, the liquidity is coming back from the summer vacation season, and therefore it does make a certain amount of sense that we could see bigger moves.

If we were to break down below the 200-Day EMA, then it’s possible that the market could really start to break down, perhaps reaching toward a 1.2350 level, and eventually the 1.20 level. On the other hand, if we turn around and take out the 1.2650 level, then we will threaten the 50-Day EMA, which of course is also widely followed and a lot of people will be waiting to see whether or not we can go higher from there, perhaps reaching as high as 1.30 level.

While I am bullish on the US dollar in general, the reality is that the British pound has been a little bit more resilient against the US dollar than many other currencies, so it does make certain amount of sense that the British pound may at least stabilize, if not turn things around completely. While I do anticipate that the rest of the world might struggle against the greenback, the reality is that the British pound might be the outlier. With that being said, I think you are probably better off owning both of these currencies, but against other ones, not each other. You can use this chart as a relative strength indicator, determining whether or not you want to own the pound or the dollar against other weaker currencies such as the Australian dollar or the Japanese yen as an example.

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