Yahoo Finance GBP to USD Forecast – British Pound Consolidates
GBP to USD Forecast Video for 11.04.23
British Pound vs US Dollar Technical Analysis
The British pound has gone back and forth during the trading session on Monday, as we continue to see a lot of volatility. At this point, it looks like the market is trying to figure out what to do next, but quite frankly this is a situation where we have dug into a major resistance barrier between the 1.24 level in the 1.25 level. Ultimately, we have to ask questions as to whether or not the US dollar is going to strengthen or weaken, and of course we have to determine whether or not risk appetite will still be out there. After all, there are a lot of different moving pieces at the moment, but we also need to keep in mind that there are multiple reasons why the British pound or the US dollar my strengthen.
Looking forward, if we can break above the 1.25 level, then it is likely that this market takes off. If it does, then the 1.2750 level might be the next target, perhaps even to the 1.30 level given enough time. Ultimately, I think this is a scenario where this is going to be about risk appetite more than anything else. The Federal Reserve has at least one more interest rate hike ahead of it, so now the question is going to be whether or not there are more than just one.
Recently, the 50-Day EMA has broken above the 200-Day EMA, showing signs of strength in what is typically known as a “golden cross.” That being said, the market is more of a “buy on the pullback” type of market going forward, therefore it looks like looking at this chart, this is a market that is going to continue to see plenty of volatility, but I think given enough time we probably have to make bigger decisions. A breakdown below the 1.2350 level opens up the possibility of a move down to the 50-Day EMA, which is closer to the 1.22 level. Underneath there, then you have the 200-Day EMA that comes into the picture as well, which of course will typically attract a lot of attention. With this being the case, I think you need to be very cautious with the position size, as we are about to make a bigger move.
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This article was originally posted on FX Empire
