GBP/USD Forecast: Fluctuates Yet Again

• The GBP/USD experienced fluctuations during Thursday's trading session, as traders remain indecisive around the 1.20 level.
• The market is expected to remain volatile, and the area below the 1.20 level is also likely to experience fluctuations, extending down to the 1.1850 level.
• This area was a major swing low in the past, and it will be interesting to see if it continues to provide support.

In the event that the pound falls below the 1.1850 level, it is highly probable that the currency will decline toward the 1.15 level. This would not only indicate weakness in the pound, but it would also likely lead to US dollar strength across Forex markets. If this happens, we could continue to see fluctuations in the short term, particularly as the 50-Day EMA and the 200-Day EMA are just above the current price level. However, breaking above these moving averages could result in traders entering the market to push the price higher, potentially challenging the 1.2253 regions, which previously experienced selling pressure.

FED Hawkishness Benefits the US Dollar

Breaking above the shooting star from last week would open up the possibility of a move back to the previous double top, located near the 1.24 level, and resistance could be observed all the way up to the psychologically important 1.25 level. If the pound breaks above the 1.25 level, it would be an extremely bullish sign.

It's important to note that the Federal Reserve continues to appear very hawkish, which is beneficial to the US dollar in general. Traders will continue to look to the interest rate market for indications of future market movements. In the short term, we can expect more volatile behavior in the market, but this is nothing new, as FX volatility has increased worldwide. As a result, short-term traders are expected to thrive in this market while swing traders await more substantial opportunities. Unfortunately, that’s probably going to be the case going forward, as are just no real conviction at this point when it comes to most assets. That being said, if you can utilize short-term charts, this might be a decent short-term buying opportunity as it does seem to see a lot of noise and interest in this area, but I would not get overly married to any particular position at this point, because of the uncertainty of the way the market has been behaving.