British Pound Gets Crushed on Risk Aversion

The British pound has broken down rather significantly during the course of the trading session on Wednesday as we have seen a massive amount of fear enter the market based upon Russia entering Ukraine. This is just the latest blow to risk appetite, and now it seems as if it is going to be very difficult to find any reason to get long, at least in the short term, so at this point in time it looks like we are getting very close to a major breakdown. After all, the 1.35 level had been massive support, but at this point in time we have blown through that like it was not even there.

GBP/USD Video 25.02.22

With that being said, think it is probably a scenario where rallies get sold into, but if we break down below the 1.3350 level, something that is very possible by the time even see this video, the bottom could open up in this market and we could go much lower. The British pound has been much more resilient than other currencies against the greenback, so keep in mind that the market is going to be very noisy, and perhaps fight against US dollar strength a little bit better than some other currencies, but at the end of the day, as long as we continue to get a major risk off type of situation, the US dollar will continue to strengthen against almost everything.

I have no interest in buying this pair unless of course Russia the escalates, and even then, I think you would probably have to see a couple of days’ worth of calm behavior before you can really get excited about buying this pair.

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