GBP to USD Forecast – British Pound Pulls Back Slightly -

GBP to USD Forecast Video for 22.03.23

British Pound vs US Dollar Technical Analysis

The British pound has pulled back slightly against the United States dollar on Tuesday as traders are starting to focus on the upcoming Federal Reserve meeting on Wednesday. After all, there are a lot of questions as to whether or not the Federal Reserve will slow down, or if it will continue to fly in the face of the markets, and fight inflation by showing a hawkish disposition.

The 1.23 level just above offers a certain amount of resistance, so it does make sense that we pulled back anyway. Beyond that, we have the 1.25 level, which is an area where we have seen a double top form. That double top shows just how leery the market is of trying to break above the 1.25 level, a major psychological barrier, and an area that’s been important multiple times throughout historical trading.

The 200-Day EMA is flat and sitting underneath near the 1.21 handle. Underneath there, we have the 50-Day EMA, so it all comes together for support. If we can break through all of that, then the market has a real chance at trying to break down below the 1.20 level, but I don’t think that happens anytime soon, at least not until we get the Federal Reserve announcement. If the Federal Reserve ends up being more hawkish than people anticipate, which the markets currently have roughly a 70% chance of a 25 basis rate hike priced in, then we could see the US dollar really take off quite drastically, sending this market plunging. On the other hand, if the Federal Reserve decides not to hike, we could see a short-term move higher, perhaps even piercing the crucial 1.25 level.

The biggest problem with this announcement is that no matter what Jerome Powell says or does, there will be a little bit for everyone in his statement. After all, if they choose not to hike interest rates, that might be seen as willing to support the markets, but then people have to ask whether or not things are worse than originally thought? In other words, I don’t expect things to become rosier after the announcement, I suspect that we are going to see more of the same volatility.

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

This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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