GBP/USD Forecast: Bears Threaten $1.20 Handle, Breakdown Could See $1.1825 Quickly – 16 February 2023

On the other hand, we could continue to consolidate, perhaps try to reach to the top of the shooting star from the previous trading session. That would obviously be an area of concern, and I think would be difficult to break above. If and when we do break above there, then you’ve got quite a bit of momentum in the market, and it’s likely that we could really start to take off. At that point, I would anticipate the 1.24 level would offer significant resistance extending to the 1.25 level. The 1.25 level is an area where we have seen noise and a lot of selling pressure, so I think it would be difficult to get above there. Quite frankly, that would be a Herculean effort just waiting to happen as it would not only break above a double top, but a large, round, psychologically significant figure that has meant quite a bit of order flow in the past.

If we do drop below and go to the 1.15 level, via the 1.1850 level, then I think you will see the US dollar pickup quite a bit of momentum in general, and that we should continue to see more of a “risk off move.” I don’t necessarily think that is going to be the case, but if it does in fact happen it’s likely that we will see the US dollar strengthened against almost everything, not just the British pound. Having said that, the British economy is a bit precarious at the moment, so it should continue to see the British pound underperform in general. The market should continue to behave the same way, so I think that this candlestick was the beginning of something bigger.

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