British Pound Continues to Plunge

The British pound has plunged quite drastically during the trading session on Monday, as there has been a lot of fear surrounding Europe and all things European, thereby making a natural tilt towards the US dollar. With that being the case, it looks like we are going to try to get down to the 1.30 level eventually, an area that should cause a certain amount of psychology to come into play with the market. After all, these large, round, psychologically significant figures tend to attract a lot of attention, and it would not surprise me at all to see that level defended quite vigorously.

GBP/USD Video 08.03.22

If we were to break down below the one level, then it would signify that perhaps we are ready to fall apart. In that scenario, the market could very well enter a bit of a freefall, and I suspect that you would see the US dollar gain strength against almost everything, not just sterling itself.

Ultimately, it is going to take something rather significant to make this market look like one that should be bought, and at the very least I would call for a move above the 1.34 level to make that a possibility. Even then, I would be a bit suspicious because of all of the resistance just above. The 50 day EMA has just crossed below the 1.35 level and is more than likely going to attract quite a bit of attention. That area would be very difficult to break above, unless of course we get some type of major “risk-on” type of situation globally, which I just do not see happening at the moment.

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