The British pound continues to struggle overall as we continue to see a lot of concern when it comes to the Brexit, as the situation is very fluid, and of course headlines continue to cause major issues with the currency and the overall outlook.
The British pound has bounced quite nicely initially during the trading session on Tuesday, but then turned around to show signs of weakness again and at the time of recording we are at the 1.30 level. This is an area that is crucial from a psychological standpoint, and of course the market has been lower than this recently. Because of that, I think we may continue to see selling pressure and make moves towards the lows again. This will be especially true if we can continue to see a lot of struggle within the British government. This is something that continues to be an issue, and the market continues to show signs of concern in this pair. Beyond that, there is a general “risk off” attitude, and I think it’s likely that we will continue to see a move towards the US dollar overall.
However, if we see some type of Brexit agreement between the EU and the UK, that will more than likely turn this currency back around and shoot straight up into the year. I think there are plenty of reasons to think that value hunters continue to come back to the British pound, but the last couple of weeks have been a bit difficult with British politician the seemingly working against their own interests as they bicker back and forth. This of course isn’t good for currency, so don’t be surprised at all if we continue to see a bit of a slump in the short term.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.