British Pound Gets Hammered

The British pound has fallen during the trading session on Tuesday to reach down towards the 1.35 region. This is an area that offers a lot of support so it is difficult to imagine a scenario where you would want to chase this market. However, I do believe that it is probably easier to be an owner of the US dollar than it is the British pound given all of the ramifications of geopolitics and slowdown concerns. Beyond that, you should keep in mind that both of the central banks are considered to be looking to tighten their monetary policy, so I think this is a bit of a noisy market and will more likely than not continue to be. There is an obvious major resistance barrier near the 1.3550 level.

GBP/USD Video 23.02.22

If we do break down below the 1.35 level, that could open up massive selling. At that point we would more than likely go looking towards the 1.3380 level, an area that we had a significant bounce from previously. In that scenario, if it does not hold it is likely that the British pound could sell off quite drastically. This would almost certainly be a “risk off” type of move, which of course does not take a lot of imagination at this point in time. I think what we are probably looking at a potential break out, but it is not going to be as easy to see in this market as it will some others. With this being the case, I think you have to keep in mind that a range bound system might be the best way to go.

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