GBP/USD Price Forecast – British Pound Breaks Through Major Figure

The British pound initially tried to rally during the trading session on Wednesday but then gave back all of the gains and sliced through the 1.20 level to show signs of weakness yet again. The fact that we have sliced through the 1.20 level shows you just how weak this pair has become, as traders are starting to punish the United Kingdom for its smaller allocation of funds to fight the coronavirus. The reality is that the US dollar is the most favored currency around the world right now, and that of course is going to show itself here. Furthermore, the British pound is also going through the entire Brexit process, so that adds a bit of skepticism here as well.

GBP/USD Video 19.03.20

All that being said though, the market is a bit oversold so it’s difficult to start shorting here. I would wait for a bounce to at least the 1.20 level, if not higher based upon some type of relief rally. Selling down here is simply chasing the trade, and that’s a great way to lose money. If the market rallies towards the 1.20 level and fails, then it’s a nice selling opportunity. Remember that relief rallies can be quite vicious, so the last thing you need to do is get caught in one by trying to short at the extreme lows that we find ourselves in. However, if you can find British pound charts that are less oversold than this one, you may be able to take advantage of the weakness in those markets.