GBP to USD Forecast Video for 09.06.23
British Pound vs US Dollar Technical Analysis
The British pound has rallied during the trading session on Thursday, showing signs of strength, but at the moment we are stuck in a major consolidation area, and we are sitting just above the 50-Day EMA. The 1.2350 level underneath offers support, with the 1.2550 level above offering resistance. Ultimately, this is a market that continues to be very noisy, and therefore I think you have to look at it through the prism of very short-term trading. The market will continue to be very sensitive to risk appetite, and of course with the Federal Reserve having a major meeting next week, a lot of people will be paying close attention to the idea of whether or not they are going to tighten monetary policy again, or if they are going to take a bit of a break.
This week we have seen a lot of volatility due to the fact that the Bank of Canada, and the RBA in Australia have tightened monetary policy unexpectedly, so all of a sudden people were starting to pay close attention to the idea that central banks are serious about fighting inflation. If that’s going to be the case, it’ll be interesting to see how this market moves, but at this point I would assume that we are still stuck in the same consolidation area that we’ve been in for a while, so I would anticipate more sideways and shopping behavior.
This would be especially true over the next couple of trading sessions, so I think it’s probably a situation where the short-term range-bound trader will probably continue to thrive in this market, simply because hanging onto a trade for any significant amount of time is going to be difficult at this point in time, because quite frankly nobody really has any true conviction. As long as that’s going to be the case, then we need to look at this through the prism of being as nimble as possible. Either way, position sizing will be crucial, just because the market remains very erratic and doesn’t seem to have any real momentum.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire