The British pound initially pulled back during the trading session on Thursday but found enough support below the 1.18 level to turn around and reach towards the 1.20 level. The level of course is a large, round, psychologically significant figure, but it is also an area where we had seen support previously so “market memory” could come into play and push this pair back down. Having said that, the initial jobs claim figures out of the United States were horrific as people would expect it to be, so it will be interesting to see how this plays out. Quite frankly, I would not be surprised at all to see this market pullback from here but if we can clear the 1.21 handle, then it is obvious that the pair is going to continue to try to recover over the longer term.
GBP/USD Video 27.03.20
Keep in mind that the British pound will have to deal with the nonsense coming out of the UK/EU negotiations once this coronavirus situation is under control, which currently has the United Kingdom under a relatively severe lockdown, crushing economic movement. At this point, the market is very likely to continue to be noisy, and I think difficult to deal with to say the least. Ultimately, this is a pair that is oversold so this bounce makes quite a bit of sense but sooner or later people will start to worry about the US dollar again. At this point, we have about a 100 PIP range that we need to pay attention to between 1.20 and 1.21 above.