GBP to USD Forecast Video for 12.06.23
British Pound vs US Dollar Technical Analysis
The British pound has rallied a bit during the trading session on Friday, as we have broken above the 1.2550 level. The 1.2550 level is an area of previous resistance, but we have previously broken above. The question now is whether or not we can hang on to the gain. It’ll be interesting to see how that plays out, because we have a lot of noisy behavior in this general vicinity, and of course we have the Federal Reserve coming next week that will throw a lot of noise into the market.
The market has bounced from the 50-Day EMA over the last couple of days, and now it looks like we are trying to threaten the highs again. The high price recently was near the 1.2675 level, and now might be where we are heading toward. Breaking above that is very bullish and could open up the possibility of a move to the 1.2750 level. On the other hand, if we were to break down below the bottom of the candlestick, then we could retest that 50-Day EMA. Underneath there, we have the 1.2350 level, an area that previously had been supported. Breaking below the support then opens up the possibility of the 200-Day EMA. Still, ultimately you have to look at that area as being very difficult to break through because we have support in the form of a price that has been important previously, and then, of course, the 2 major moving averages.
Whether or not we break out remains to be seen, and I fully anticipate that there should be a violent reaction to the Federal Reserve next week, and if that happens, the next trade should be rather obvious. Both of the central banks are very tight with their monetary policy, so do not be surprised at all to see choppy trading between now and the resolution to the movement, whenever that actually shows up. Look at this chart, it certainly looks bullish, but there’s so much noise above that it will be difficult to get aggressive. Shorting would be almost impossible, at least until we break down below the 200-Day EMA.
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This article was originally posted on FX Empire