GBP/USD Forecast: Pound Struggles in the Same Region – 07 March 2023
In the short term, traders may want to consider a “fade the rally” strategy.
According to analysts, until the pound is able to break out of its current trading range, it is difficult to make any bold predictions. Traders are waiting for an impulsive candlestick to provide a clearer direction. In the meantime, the 1.20 level appears to be a key magnet for price, with the market hovering around this level for some time. If the pound is to make a significant move, it will need to either break above this level or drop below it.
Looking at the chart more closely, there have been a series of lower highs, indicating that the pound is losing momentum. However, there is some support at the 1.1925 level, which could extend down to the 1.1850 area. If the pound does break below these levels, it could kick off a major leg lower, possibly opening up a move down to the 1.15 level.
On the other hand, if the pound were to break above the 1.21 level, it is possible that it could reach the 1.24 level, although a double top at this level could make further gains difficult to sustain. Traders should be prepared for a lot of noise in the market, making it difficult to determine a clear direction.
In the short term, traders may want to consider a “fade the rally” strategy. This means selling the pound when it rises towards resistance levels and buying it when it falls towards support levels. This approach could help traders take advantage of the market’s volatility and make some short-term gains.
Overall, the British pound is in a state of flux, with traders waiting for a clear direction to emerge. Until then, it is likely to be a noisy market with plenty of ups and downs. Traders should keep a close eye on key levels of support and resistance, and be prepared to act quickly if the pound makes a significant move in either direction. Quite frankly, the markets can tread water for only so long.
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