The British pound has rallied significantly during the trading session on Wednesday but has struggled with the 1.20 level yet again. At this point, the market looks likely to continue to see a lot of noise above, and it’s not until we get a daily close above the 1.20 level that I would be impressed with the rally. After all, look at the velocity of the down move that we had seen recently and at this point the rally, while nice, has been yet nothing but a blip on the radar. Ultimately, we need to see the daily candlestick’s close above 1.20 before taking the rally seriously.
GBP/USD Video 26.03.20
There is still a huge demand for the US dollar, and that will of course push this pair lower in general. Underneath, the 1.15 level has offered significant support, and obviously it would be a big target for those trying to short sell the British pound. If we break down below there, it’s likely that the market goes down to the 1.1250 level, and then eventually the 1.10 level. This would not be a huge surprise considering that the United Kingdom is essentially locked down at the moment, but longer-term I think this is going to offer a nice buying opportunity for those who are longer-term minded. Ultimately, this could be a career making trade but it’s a bit premature to think that the British pound is certainly going to take off to the upside because after this virus gets out of the way, we still need to pay attention to what’s going on with the negotiations between the United Kingdom and the EU.