2023 has arrived, and it promises no less turmoil and chaos on the markets than 2022. The main event in 2022 was a major war in Europe, Russian aggression against Ukraine caused an energy crisis in Europe that heavily affected global markets. Do not forget also a possible famine because Russia and Ukraine are main suppliers of wheat, feeding billions of people. Fed’s anti inflation policies caused interest rate hikes and a possible recession is going to affect even more people. All these events are going to affect pound pairs in 2023. In this article, we will discuss and analyze possible GBPUSD and EURGBP trends and tendencies in 2023.
EURGBP predictions for 2023
EURGBP is a pair that consists of two most powerful European currencies UK’s pound sterling and European Union’s Euro, it shows how much pound do you need to buy 1 Euro. To predict its price with high accuracy, we will need thorough analysis of EURGBP pair. There are two ways to analyze Forex market, one is fundamental analysis and the other is technical analysis.
Fundamentals mean analyzing macroeconomic indicators and events to predict how the price will be affected by these events. Technical analysis relies on charts and their analysis through various mathematical algorithms called indicators and other statistical tools.
Fundamental analysis alongside technical analysis is a central staple of successful Forex trading, and knowledgeable experts from Axiory will guide you through the trading process on this website. Generally, the combination of fundamentals with strong technical analysis will increase your success rate greatly.
Let’s start with the fundamental outlook of the pound. After Brexit, the pound was mostly in a bearish market. While this is good for traders as they made good profits from the event. This is not positive for the UK’s economy. What will GBP do in 2023? Let’s evaluate the situation from a fundamental and technical point of view and combine them for maximum accuracy. Fundamentals will tell what is going overall with pound, and technical will help us see possible scenarios and entry points.
From a technical point of view, EURGBP is in an uptrend right now on a monthly chart. The next resistance level is located at the 0.9096 zone and there are not many powerful zones before that, so it is likely that the uptrend will continue. If price continues to rise, we will see EURGBP test this 0.9096 zone sometime in 2023. After this, it will try to breakout this zone or fall back. So watch carefully when price is in 0.9096 territory, it could quickly escalate to fall or breakout. If price breaks the zone, the next zone will be at 0.9277. EURGBP tested 0.9277 several times in previous years, failing every single time. It is likely that a great battle will occur again between bears and bulls in this zone. This uptrend could be hard to maintain because of Europe’s energy crisis, weakening the Euro against other currencies. This could change the trend to downwards, so traders must exercise extra caution when dealing with this pair.
GBPUSD 2023 predictions
The UK’s new prime minister, Rishi Sunak, seems very familiar with finances and has working experience for Goldman Sachs and two hedge funds, and is the husband of a millionaire. He successfully predicted financial problems under Truss and thereby has the potential to properly manage the UK’s economy and make sterling stand its ground against the USD and Euro. From the fundamental point of view, GBP is going to stand its ground and has a little more chance for strengthening.
Let’s switch to technical analysis for a clearer picture.
In Dec. 2022, GBP tried to break the level at 1.22 but failed and now is closer to that level again. Will GBPUSD manage to break out and continue the bullish move? It is hard to predict exactly, but we have two possible scenarios for GBPUSD. First is that GBP breaks the level which will be followed by an upward impulse as the next level is at 1.39. This will be a huge price swing and swing traders and especially day traders have to look at this level very carefully. Up to 1900 pips could be made this way. The 2nd scenario is that GBPUSD will fail to break the 1.22 level and will fall again back, recent support level is 1.04 and if the pair decides to fall this will be some nice 1700 pips move downward. So, no matter in which direction the price decides to go, traders can make about 1500 pips potentially.
Conclusion
After combining fundamentals and technical, we see two possible scenarios for GBPUSD that is testing important levels right now. For EURGBP the trend is bullish and the recent zone is high enough for its price to continue rising. No matter what GBPUSD and EURGBP decide to do, traders will make money and in pips this could be around 1500 pips move.
