GBP to USD Forecast – British Pound Continues to Hang On to Support
GBP to USD Forecast Video for 21.02.23
British Pound vs US Dollar Technical Analysis
The British pound has gone back and forth during the trading session on Monday in relatively tight trading. The 1.20 level is obviously a large, round, psychologically significant figure that a lot of people will be paying attention to, and an area that previously has been important. There is a significant amount of support going down to the 1.1850 level, which was the most recent swing low. This area is one that I will be paying close attention to, because I think it leads the way for where we go next.
If we were to break down below the 1.1850 level, then it’s very likely that we could see a major shot lower in the British pound, as there’s a bit of an air pocket underneath, opening up the possibility of a move down to the 1.15 level, an area that is also psychologically important, and of course has previously seen a significant amount of resistance. Furthermore, you can make the argument that the payer is trying to form a significant “M pattern”, with the double top sitting right around the 1.24 level.
The 50-Day EMA sits just above, about 100 pips higher than current trading. It sits just underneath the 200-Day EMA, with both of them looking relatively flat. In this scenario, one would have to assume those moving averages would end up being a significant dynamic resistance level, so it most certainly is something that we should be paying attention to. A move above there then opens up the possibility of an attempt to break above the shooting star from last week, which shows fierce resistance near the 1.2267 level.
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This article was originally posted on FX Empire
