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GBP to USD Forecast – British Pound Continues to Form a Potential Double Top

GBP to USD Forecast Video for 26.01.23

British Pound vs US Dollar Technical Analysis

The British pound has drifted a little bit lower during the trading session on Wednesday, as it looks like we are in the midst of potentially forming a huge double top pattern. This would make a certain amount of sense, because it looks like we are struggling with the 1.25 level and the psychology behind it. Furthermore, there are a lot of concerns about the British economy, because even though there’s a lot of inflation, there’s very little in the way of growth. In this environment, all we need is some type of catalyst to kick a run to the dollar in high gear, and I suspect that the British pound is going to be one of its biggest victims.

Currently, it’s not until we break above the 1.25 level that you can look at this chart and say, “okay, we are ready to go much higher.” In the meantime, I suspect that we probably have more of a sideways grind than anything else happening, and therefore I am looking at this through the prism of short-term trading, fading short-term spikes for short-term moves. If we were to break down below the 1.20 level, then I think we could really start to fall apart, perhaps reaching down to the 1.15 level. It is worth noting that the 50-Day EMA and the 200-Day EMA indicators are sitting at roughly 1.21, and could cause some noise as well. Either way, get used to the volatility, because I don’t see it going away.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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