Yahoo Finance GBP to USD Forecast – British Pound Testing Major Resistance
GBP to USD Forecast Video for 05.06.23
British Pound vs US Dollar Technical Analysis
The British pound has rallied to reach the 1.2550 level during the trading session on Friday, as the jobs number came out in the United States almost triple what was anticipated. That being said, we are paying close attention to the idea of whether or not the Federal Reserve will have to raise rates, or if they will back off a bit.
Regardless, this is an area where you would expect a certain amount of trouble anyway, due to the fact that it had been important previously, so therefore it’s not a huge surprise that there’s a little bit of “market memory” in this area. With that being the case, I think we’ve got a situation where you have to look at this through the prism of the possibility of more consolidation. After all, the market will continue to see a lot of noisy behavior under the best of circumstances, and now that people are thinking that perhaps the Federal Reserve will have to stay very tight going forward.
With this being the case, I would anticipate a lot of back-and-forth, but ultimately this is a scenario where we would see a lot of noise based upon the idea that traders will have to readjust their portfolios based upon expectations, but it will be interesting to see how this plays out over the next couple of days. If we can break above the 1.2650 level, then you could go much higher, perhaps reaching to the 1.30 level above. On the other hand, if we were to drop down below the 50-Day EMA in the 1.2350 level, then we would break through a major uptrend line, and allow this market to drop quite a bit. In that scenario, we could see a bit of a short-term correction down to the 1.1850 level.
That being said, with all of the banking issues out there, it appears that the traders around the world believe that the Federal Reserve will have to back off, so whether or not we can change the overall trend remains to be seen, despite the fact that economic reality dictates that we should be running toward safety.
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This article was originally posted on FX Empire
