GBP/USD Forecast – British Pound Trying to Stabilize

GBP/USD Forecast Video for 24.07.23

British Pound vs US Dollar Technical Analysis

The British pound has gone back and forth during the course of the trading session on Friday, as it looks like we are trying to stabilize a bit. That being said, the market breaking above the top of the candlestick would open up a possible long position, but jumping into the markets right away doesn’t make quite a bit of sense, because you could have made the same argument for the last couple of sessions. Underneath, we have the 50-Week EMA, which offers support. Right along with that, we have the uptrend line, so I do think that it is probably only a matter of time before things turn around, but at the end of the day the Bank of England has to worry about quite a bit of inflation.

With that being the case, the Bank of England will more likely than not continue to be tight with its monetary policy, and therefore the British pound might be one of the better performers. Even if the US dollar suddenly takes off, I would be more interested in the US dollar against other currencies rather than the British pound, as it has put up quite a bit of a fight for some time.

In general, I would anticipate quite a bit of noisy behavior, so therefore you have to be cautious with position sizing, but once we get a bit of confirmation, then I’m willing to add to the British pound, and at this point wouldn’t even be interested in shorting the British pound until we break down below the 1.2650 level. If we were to break down below there, then it’s likely that we could go much lower. That being said, it would probably be more or less a US dollar move in general. That being said, I still prefer to buy US dollars against weaker currencies such as the Japanese yen, the New Zealand dollar, and perhaps even emerging market currencies. If the British pound were to break down, I just don’t think you get as much mileage out of your trade. On the other hand, the upside could open up the possibility of a move to the 1.30 level, and then the 1.3250 level after that.

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