GBP/USD Weekly Forecast – British Pound Recovers for the Week

GBP to USD Forecast Video for 09.10.23

British Pound vs US Dollar Weekly Technical Analysis

The British pound has initially fallen during the course of the week, dipping down toward the 1.20 level before turning around and bouncing quite drastically. Ultimately, when you look at the chart, it’s a situation where the British pound has been selling off so drastically that a bounce had to come sooner or later. The resulting hammer does suggest that perhaps we could go higher, with the 1.2350 level above offering a short-term target. That being said, this is a market that had to recover sooner or later, and therefore I think it’s only a matter time before the sellers come in and push this market lower due to the fact that the interest rate markets in America are signaling a tighter monetary policy.

The 50-Week EMA is sitting near the 1.25 level and is dropping, and therefore it’s likely to offer significant resistance. It’s not until we break above there that the market truly takes off to the upside. In general, this is a market that remains volatile, but like the Euro it’s very possible that we are in an oversold condition and just needed to bounce a bit.

Looking at this chart, I’m still bearish but I recognize that it is probably going to continue to be a bit of a mess, and therefore you need to be very cautious with this type of volatility. Ultimately, caution is the better part of valor, therefore you need to recognize the fact that the market is a little overdue for a short-term bounce. With that in mind, I am waiting for signs of weakness after a rally that I can start selling into. It may be a week or 2, but the trend certainly has not changed.

For a look at all of today’s economic events, check out our economic calendar.