Good news for holidaymakers buying dollars this year
26th January 2023 07:39
by Alistair Strang from Trends and Targets
After hitting a record low, the pound is in recovery mode. Independent analyst Alistair Strang assesses the outlook for anyone intending to travel overseas this year.
We were probably not alone last year, suspecting sterling intended parity with the US dollar and the euro. But despite the best efforts of several UK prime ministers during 2022, the pound resolutely refused to collapse.
In fairness, sterling has been recovering slowly from last October’s lows. However, this Forex pairing is now getting very close to a “no brainer” trading opportunity, as recovery will be difficult to avoid should the relationship strengthen above 1.2450.
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Above such a visual trigger should now make recovery to an initial 1.2858 a fairly confident proposition. Our secondary, should such a level be exceeded, works out at 1.3338, challenging the Blue downtrend which dates back to 2007.
Unfortunately, the only sane stop loss level looks like matching the low of 2023 at 1.1840, doubtless wider than most folk would prefer.
Source: Trends and Targets. Past performance is not a guide to future performance.
If things intend to go horribly wrong for GBPUSD, visually below 1.1500 should give early warning for real trouble. Such a drop risks triggering reversal to 1.007 initially with secondary, if broken, at 0.8736.
For now, we are inclined to believe the visuals on the chart, most of which indicate this pairing is due some serious gains.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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