GBP/USD Forecast – British Pound Testing 200-Day EMA

GBP/USD Forecast Video for 17.11.23

British Pound vs US Dollar Technical Analysis

The British pound initially fell a bit during the trading session on Thursday breaking down below the 200-Day EMA, but then turned around to show signs of life. What’s particularly interesting about this area is that it is the top of the bearish flag that we had been in, so I think at this point in time it does make a certain amount of sense that we have a fight on our hands. If we continue to break down, then we could go to the 50-Day EMA, perhaps even down to the bottom of the bearish flag that we had been in. Regardless, it looks like that pattern is essentially broken, but it will be interesting to see if this previous trendline holds for support.

A lot of this is going to come down to the interest rates in the United States, as it has such a huge influence on the greenback itself. With the idea of inflation cooling in the United States, the US dollar got absolutely hammered during the trading session on Tuesday, but now we have to determine whether or not we can continue that type of momentum. As a general rule, these types of candlesticks very rarely happen in a vacuum, so I anticipate that we probably have some consolidation in the near term just waiting to happen.

That being said, if we were to break above the 1.25 level on a daily close, then I think the British pound has much further to go to the upside. At this point, I would anticipate a move to the 1.28 level rather quickly as well. This would be a continuation of the overall reversal, or perhaps even short covering rally that we’ve recently seen. Whether or not the market continues to see upward momentum is about to make itself apparent here in the next couple of sessions, but it does make a certain amount of sense that we would see the market try to work off a significant amount of the froth, so consolidation does make a certain amount of sense. Ultimately, I think you continue to see a lot of noisy behavior, and therefore short-term trading may make more sense over the next couple of days until we get either a resurgence of bullish pressure, or if we get some type of significant breakdown.

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