British Pound Plunges Towards Support During the Week

The British pound has broken down significantly during the trading week to reach towards the 1.31 handle. That being said, the 1.30 level is an area that I think a lot of people will be focusing on, as it is an area of psychological and structural importance. If we were to break down below that level, then it is likely that the British pound could fall apart. That being said, it is not necessarily mean that it is going to be easy to get above there.

GBP/USD Video 14.03.22

Any rally at this point in time will more than likely be sold into, as the US dollar is without a doubt the currency that most people want to hold. Any rally at this point in time I would be looking for signs of exhaustion and jumping all over it. The 1.33 level above is a significant resistance area, so breaking above there could open up the possibility of a move towards the 1.35 handle, but I do not see that happening unless, of course, the Federal Reserve sounds a lot more dovish than anticipated next week.

Keep in mind that any major “risk-off” type of move in the markets overall will almost certainly send this pair lower, as money will run towards the US dollar for safety. Any break below the 1.30 handle could be a major selloff just waiting to happen. At that point, the 1.28 level could be a target that people start looking towards. Ultimately, I think the only thing that you can probably count on is quite a bit of noisy and volatile behavior.

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