GBP/USD Outlook for 2024

British Pound Forecast Video for 2024

Unfortunately, there are a lot of things out there that could move the market in both directions, and as we close out the year 2023, we are essentially in the middle of the overall range of the year. This suggests that we could see an explosive move, but it takes quite a bit to break out of this massive range that we had been in.

Federal Reserve and Bank of England

The Federal Reserve in late December has decided to move some of the dots on its dot plot to suggest that there are interest rate cuts coming in 2024. While this could initially be very bullish for the British pound, or perhaps better put, negative for the US dollar, the reality is that people will eventually begin to ask why the Federal Reserve is doing this. If it is a concern about recession, that could in turn somewhat ironically push up the value of the US dollar as people start to put money into treasuries to at least earn some type of yield.

On the other hand, the Bank of England seems to be paying closer attention to inflation than the Americans are, so that suggests that perhaps the British pound may have a higher interest rate attached to it for longer. That in theory should be good for the British pound. Therein lies the issue, are traders going to be focusing on interest rates, or are they going to be focusing on a slowing global economy? I suspect during this year, it will be a little bit of both, with wild swings in both directions.

Technical Analysis

The pair has essentially gained slightly in the year 2023, but it took a huge path up and down to get to where we are. It’s not as if you just simply sat on this asset all year and made a slight gain, even if you had done that you have dealt with a lot of volatility and probably nausea. The 200-Week EMA sits just above and is offering a little bit of resistance as I record this video, but at the end of the day it’s been sliced through a couple of times. I can say the same thing about the 50 week EMA underneath, and therefore I think the moving averages flattening out suggests that we are going to go into a range as well.

The 1.3150 level above was the high for 2023, and I think that is a massive barrier that you need to be aware of during 2024. The 1.25 level of course is essentially “fair value” at the moment, and I think that probably has a little bit of influence as well. On the downside, the 1.1850 level was the floor and should be massive support. It would not surprise me at all to see this market touch both of those outer levels again during the year.

We could start out somewhat positive, but I think at one point in the year, we will see a huge rush toward the US dollar, as it has been oversold as of late, and of course I do anticipate a lot of economic turbulence this year, which generally will have people looking for the safety of the greenback sooner or later. I also anticipate that the Federal Reserve will step in and try to liquefy everything, which will turn the trajectory of the US dollar back around. In other words, I expect the year to be just like 2023.