GBP/USD Forecast – British Pound Tries to Bounce

GBP/USD Forecast Video for 31.10.23

British Pound vs US Dollar Technical Analysis

The British pound has initially pulled back just a bit during the trading session on Monday, but then turned around to show signs of life. The 1.21 level is an area that has been important more than once, and therefore it looks like we are hanging around the bottom of the overall bearish flag that we have been in. All things being equal, this is a market that I think continues to see a lot of volatility due to the fact that the US dollar is so strong that it has a lot of interest rate pressures behind it, and then of course we have a lot of geopolitical concerns out there that will have people looking for safety.

A short-term rally at this point in time is likely to be an opportunity to start shorting again, with the 50-Day EMA offering a short-term ceiling near the 1.23 level. All things being equal, this is a market that continues to see a lot of volatility, and we are at an extreme low. A short-term rally is very possible, but I think at this point in time it’s an opportunity to pick up “cheap US dollars”, and therefore it’s likely that we will continue to see a lot of downward pressure. If we were to break down below the hammer from the Thursday session, then it opens up and move down to the 1.20 level. Breaking down below the 1.20 level, then opens up the possibility of a move down to the 1.1850 level, an area that has been massive support previously.

The markets are going to be paying attention to geopolitical concerns, and that may be the overriding factor at this point, not so much anything going on in the United Kingdom. I think that we continue to see a lot of choppiness, and therefore I’m just looking for a rally that I can start shorting. If we were to break above the 1.2350 level, then it’s possible that the market could go higher, and at that point I would probably be a buyer. Until then, I’m looking for short this market giving opportunities.

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