The British pound has fallen rather hard during the trading session on Wednesday as we continue to move on the latest rumors and statements coming out of the Brexit situation, which seems to be dragging on. At this point, it is probably worth noting that every time this market pulls back people are willing to jump in and take advantage of value. I do think that this is something worth paying attention to, due to the fact that British pound is historically cheap, and of course the quote currency in this pair is the US dollar. The US dollar of course has been hammered over the last couple of days.
GBP/USD Video 03.12.20
All things being equal, I believe that the 1.3250 level should be supportive, just as the 50 day EMA underneath is. Ultimately, the market is likely to continue to see if it has the momentum to reach above the 1.34 handle and go looking towards the 1.35 level. If we get some type of Brexit news that is positive, that will send this market to fresh highs again, and perhaps even send it much higher as we are historically cheap. That being said, I think we continue to buy short-term dips but be aware the fact that this is a pair that is going to be very rocky to say the least. The size of the candle is something to pay attention to but at the end of the day what I think is the most important thing to pay attention to is the fact that the British pound simply will not die.
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