The British pound has gapped lower to kick off the trading session on Monday to kick off the week as coronavirus lockdowns and concerns in the United Kingdom will weigh upon the British pound. Furthermore, there was a lack of liquidity in the markets due to the fact that it was holiday trading, and of course this meant that the market was moving much more rapidly than usual. The 50 day EMA has held up so far, right along with the 1.3250 level. This was an area that has been important more than once, so it is interesting that we have held here.
GBP/USD Video 22.12.20
Stimulus in the United States will continue to weigh upon the US dollar, but there was a clear run towards safety during Asian trading, which lasted throughout the European session. That being said, this is a market that seems to be slowing down as New York jumps online, perhaps in a bid to settle everything a bit after this massive move. Ultimately, this is a market that should continue to be very noisy, but the question now is whether or not we will recover anytime soon? All things being equal though, I think there are still arguments to be made to the upside but obviously things need to calm down.
Remember, the markets have always seemed to find a reason to buy the British pound, and with Brexit talk still going on, one thing said it would only be a matter of time before some type of good news comes into the marketplace and send the British pound straight up in the air. That being said, I would be very cautious about my position size.
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