British Pound Falls Hard

The British pound initially tried to rally during the trading session on Wednesday but gave back the gains in order to reach towards the 1.32 handle, an area that is previous resistance. At this point, it should end up being supported, based upon the “market memory.” With this being the case, the market is likely to continue being very noisy, so the question now is whether or not the British pound can continue to rally?

Looking at this chart, it is obvious that we have been in a downtrend for a while, so at this point in time is likely that we go looking towards the 1.30 handle underneath. The 1.30 handle underneath is a large, round, psychologically significant figure, and that in and of itself will cause a certain amount of attention. If we were to break down below there, then it is likely that we go looking towards the 1.28 handle.

GBP/USD Video 24.03.22

The 50 Day EMA is above and shrinking lower. This suggests that it is only a matter of time before the resistance builds up, but if we do break above the 50 Day EMA, then it is likely that we go looking towards the 1.34 level. The market will continue to see a lot of volatility, but that is going to be the case with most currency pairs at this point.

There is a lot of geopolitical, inflationary, growth, and interest-rate noise out there, so that of course is going to continue to be what keeps the currency markets very difficult at the moment. This is a market that I think continues to see indecision but still is technically in a downtrend.

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