British Pound Pulls Back Slightly

The British pound has pulled back a bit during the trading session on Thursday to break down below the 1.34 handle. All things being equal, the market looks as if it continues to hang about in the consolidation region. The market has been very noisy over the last couple of days, but it looks as if the market is going to simply stay in the same range. If we were to break above the 1.3450 handle, then it is possible that the market could go looking towards the 1.35 handle, an area that has a lot of psychology attached to it and also is the same area where the 50 Day EMA currently resides.

GBP/USD Video 04.03.22

On the downside, the market is likely to respect the 1.33 handle as support, and therefore I think that the market breaking down below there would be a big deal. At that point, I would anticipate that we would see a lot of pressure, sending this market down to the 1.32 handle, and then eventually the 1.30 handle. The 1.30 handle being broken would be a major disruption of any type of strength coming out of the British pound, but that seems to be very unlikely at this point, Bahrain of course some type of major shock to the financial markets and a huge run towards safety.

I think the most likely of situations is that we just go back and forth over the next couple of sessions, which would make a certain amount of sense considering that a lot of people are confused as to where we are going to go next when it comes to risk appetite.

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