GBP/USD Forecast – British Pound Takes Off

GBP/USD Forecast Video for 06.11.23

British Pound vs US Dollar Technical Analysis

The British pound has rallied rather significantly during the trading session, breaking above the 1.23 level quite handily. At this point, I think the market is likely to continue seeing quite a bit of volatility, and it is worth noting that the market has been extraordinarily overdone in one day. However, it’s very rare that a candlestick like this appears in a vacuum. As I record this video, we are testing the top of the bearish flag, so it’ll be interesting to see how this plays out. If we start to sell off in this area, I might take a small position to the downside, but at this point it is a little bit difficult. If we break above the 200-Day EMA, then the market is likely to continue going higher, perhaps opening up a move to the 1.27 level.

Keep in mind that the interest-rate markets in the United States have dropped rather significantly as of late, and this has had a major influence on the greenback and then of course the jobs report on Friday was very weak, and therefore it has people thinking that the Federal Reserve might step away from tightening policy quicker than anticipated. I believe this is absolute nonsense, but the reality is that the market buys into this narrative, so it will more likely than not continue to fight to the upside.

The size of the candlestick is huge, and therefore we may break above the top of the bearish flag, but if we do not, that would be a very negative sign, and it could show that we had gotten far too ahead of ourselves. In general, this is a market that I think will continue to see a lot of noisy behavior, but I am watching that 200-Day EMA above for signs of whether or not we can break above it. At this point, we are almost certainly at an inflection point, something that we will have to pay close attention to. While I am not ready to short this market yet, I will be watching very closely in this area.

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